Is a CPT Code for Prior Authorization a Good Idea?

Another meeting of the American Medical Association's (AMA) CPT Editorial Panel has come and gone. There is a lot to talk about from this meeting, including the withdrawal of an application for a CPT code for prior authorization. Is such a code a good idea? And if so, why was the application withdrawn before panel members could discuss it?

 

We may never know the full reasons why the applicant, Alex Shteynshlyuger, M.D., withdrew his application just prior to it being taken up by the panel. We know that time spent performing prior authorizations on the day of an E/M service can be included in the time for selecting and E/M code, but the problem still exists because prior authorizations are typically done before the patient even comes into the office. By listening to what proponents of the code and the American Health Insurance Plans (AHIP) have to say, one can make the case that a new code is needed.

 

As you know, CPT codes are billing codes. They are intended to streamline the billing process by making sure providers and payers are on the same page. A code's purpose is primarily intended to facilitate reimbursement. This gives us the first clue as to why a CPT code for prior authorization is warranted. Not having a billing code for prior authorizations means organizations are currently left uncompensated for the time and effort they put into this time consuming process.

 

Prior authorization is a process whereby physicians obtain payer approval before providing certain services, tests, etc. Payers have instituted the prior authorization process to control their costs. However, the model has become burdensome to both medical providers and their patients.

 

From the insurance company's perspective, prior authorization is an administrative issue rather than a care issue. As such, most insurance contracts do not reimburse physicians for time spent on prior authorization tasks.

 

Dr. Shteynshlyuger was quoted by Fierce Healthcare as saying that "every time a physician does prior auth, you’re actually pulling money from their pocket because there is no compensation. It can take hours to prior authorize a $10 medication and we aren’t getting paid for that.”

 

Implementing a new CPT code to cover prior authorization would give healthcare providers an opportunity to be reimbursed for the time they put into certain administrative tasks. Those tasks could include everything from contacting a payer for prior authorization to preparing the necessary paperwork to see it through.

 

In theory, this would benefit patients by reducing potential delays in receiving care. The theory is that being paid for prior authorization tasks would incentivize organizations to put more time and effort into them. They would mind this task less if they were actually being compensated for their efforts. Meanwhile, faster approvals mean patients do not wait as long for recommended care.

 

For their part, insurance companies maintain that the new code would add to their administrative burden and increase costs on their end. It is a legitimate concern. Payers would have to assess the validity of prior authorization reimbursements based on very little information that could be difficult to quantify. There would be an added burden in terms of identifying potential fraud.

 

One way to satisfy everyone without a new CPT code is to simply speed up the prior authorization process. Perhaps it shouldn't take hours to pre-authorize a $10 medication as Dr. Shteynshlyuger has suggested.

 

This might be one area in which medical billing could be radically changed by AI. An AI solution that automates pre-authorization has the potential to benefit both providers and payers. No one would need to be reimbursed hence, no new code.

 

The common consensus is that a CPT code for pre-authorization tasks is inevitable. It is just a matter of time. What do you think? Would implementing such a code be a good idea?