North Carolina Health News
News. Policy. Trends. North Carolina.
Amanda Watson was diagnosed with breast cancer three weeks after having an emergency cesarean section to deliver her second son. Her test results showed she had one of the most aggressive forms of breast cancer, with a high recurrence rate and low survival rate.
The following six months of chemotherapy treatments included five hospitalizations, the loss of her hair, and the inability to care for herself or her children.
To make a gut-wrenching situation worse, her insurance company denied coverage for treatment multiple times, leading to delays in her care.
Her denials included one for a certain chemotherapy and another for a medical device to remove excess fluid retained after her mastectomy.
“It’s hard not to waver in your convictions and not to lose hope during this type of battle,” she said. “When an insurance company can so blindly look at you, not as a person, not as a wife, not as a daughter, not as a mother of two babies … just as a simple word, ‘approved or denied.’”
Watson recounted her story during a news conference Jan. 28 held by the North Carolina Medical Society, which represents physicians and physician assistants. Medical Society leaders called for reform to a process known as prior authorization, in which insurance companies require patients and doctors to jump through hoops before they’ll approve some treatments, tests or doctor visits.
The goal for insurers is to avoid unnecessary or inappropriate utilization of health services. Advocates say, for their part, that prior authorization is a way to deny care and boost insurers’ bottom lines.
Overtreatment is a problem in the U.S. health care system, but John Thompson, vice president of advocacy at the NC Medical Society, said that’s become “another excuse” used by insurers.
Watson’s one of many North Carolinians who have experienced a tug-of-war between their insurance company and doctor over treatment. Some lawmakers from the North Carolina House of Representatives want to change that by passing legislation to, as they put it, lessen the administrative burden on physicians and rein in the use of prior authorization for those in state-regulated health plans.
There’s precedent for this. During President Joe Biden’s final year in office, the Centers for Medicare and Medicaid Services made rule changes to the prior authorization process in federally regulated plans like Medicare to improve the electronic flow of information between providers and insurers, and set time limits for how long it can take for an insurer to respond to a physician’s request for treatment.
This idea is to save providers time and money.
Rep. Timothy Reeder (R-Ayden), an emergency room physician from Pitt County, said that reforming the prior authorization process in the state will be at the top of his legislative agenda. Reeder co-sponsored a bill to improve prior authorization during the 2023-24 legislative session.
That bill, House Bill 649, unanimously passed the House but came to a screeching halt in the North Carolina Senate. This time around, Reeder hopes things will be different; he said there’s more interest in the topic now at state and national levels.
“The time is really now,” he said. “For the Senate to not take up this bill, not hear it, not to work on this bill, is something that we’re going to push hard on, both personally and as a chamber.”
Only one senator attended the event — freshman Sen. Mark Hollo (R-Conover), a retired physician’s assistant, who also served in the House of Representatives. He said he’s “anxious to get started” on this issue with his House colleagues.
The reforms could take place in multiple bills throughout the session, according to Emma Kate Burns, health policy manager at the N.C. Medical Society. Last session’s bill applied to a small number of plans, but this time, the plan is to have the reforms apply to as many plans subject to state regulation as they can.
The 2023 bill would’ve required insurers to update their review criteria each year and similar to the new federal rules, would have provided time frames in which insurers must make decisions based on how urgently a treatment is needed, as well as set limits on when retrospective denials can occur.
Randy Aldridge, vice president of communications and marketing at the medical society, said the upcoming legislation will likely have similarities to HB 649.
Some of the society’s suggested reforms include the standardization of timelines for approval/denial and exemptions for clinicians with high approval ratings, as well as standardized lists of which treatments and medications require prior authorization.
Rep. Grant Campbell (R-Concord), an obstetrician-gynecologist, spoke about his experiences with prior authorization at the news conference. He used the example of one of his patients who was in their late 20s and had an ovarian mass “slightly smaller than a football.”
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He suspected the mass was malignant cancer and scheduled the patient for surgery to evaluate. A few days before the surgery, the insurance company denied coverage for the procedure. Campbell had to explain why it was necessary in a peer-to-peer review with a health care provider working for the insurance company.
The provider was a psychiatrist who told Campbell he couldn’t do the surgery until he tried birth control pills as a treatment first. Campbell said it was upsetting to be told how to treat a patient by someone who was not an OB-GYN.
“This is about delaying care,” he said. “This is about forcing patients and physicians to settle for cheaper, less effective care, or ultimately hoping the patient gives up and pays out of pocket.”
Internist and pediatrician John Meier, president of the medical society’s board of directors, said insurance companies look at costs year to year and may base prior authorization decisions on those numbers. In contrast, he said, providers are thinking about the health of the patient years down the line.
He also argued the administrative burden on providers and staff takes away from time caring for patients.
Campbell said he had to hire staff solely dedicated to handling prior authorization requests with insurance companies.
The medical society cited numbers from the Council for Affordable Quality Healthcare, a nonprofit alliance of health plans and related associations working to streamline the health care system, that providers spent an average of $11 for each manual prior authorization transaction in 2019, while plans spent $3.
Insurers argue that prior authorization reduces costs for patients by preventing unnecessary treatments, which helps to contain costs. In a statement from Peter Daniel, executive director of the NC Association of Health Plans, an industry group, he claimed that North Carolina has the highest health care costs of any state and insurers also want to bring those costs down while improving patient care.
“Health plans have taken several steps to work toward those goals by reducing administrative burdens on providers,” he said. “We remain willing to work with other stakeholders and the General Assembly on comprehensive and meaningful regulatory reforms to our health care system that will lead to more affordable care and better health outcomes for North Carolinians.”
Campbell said at the conference he doesn’t want this to have to be a legislative solution — but if insurance companies don’t come forward with a fix, legislation may be necessary.
Daniel told NC Health News that the association has tried to work on these issues with the medical society without success. He said he would prefer finding a solution in conjunction with providers and taking that to the legislature, rather than having lawmakers enact a government mandate.
“Where the private sector can’t fix it and the government comes in, there are all sorts of unintended consequences,” he said.
Companies also hear complaints from their customers about this bureaucratic process, Daniel said and he argued that some major plans have been working for over a year to take “hundreds of procedures” off the list of those that require prior authorization.
“We just ask that the rhetoric be turned down,” he said. “Let us sit at the table. Let’s work towards consensus.”
Gina Upchurch, executive director of Durham-based Senior PharmAssist, said she sees both sides of the conflict. While it is true that insurance companies can make a lot of money denying care, providers in the U.S. are also paid more than those in Europe even as overtreatment remains a problem, she said.
“Everybody loves a scapegoat. Hospitals will say it’s insurance companies. Providers say the hospital and insurance company are bullies,” she said. “Everybody’s pointing a finger, but everybody’s, in many ways, just gaming in the system.”
Still, the administrative burden on providers is a problem, she said. And as providers have to deal with different companies and different processes for each patient, streamlining the prior authorization process would help lessen that burden.
The federal government has already taken steps to make changes to the prior authorization process to “reduce administrative burden.” Any changes enacted by the N.C. General Assembly wouldn’t affect the federal Medicare program, but for the more than 2.2 million North Carolinians who are eligible for Medicare, the 2024 reforms from the Centers for Medicare and Medicaid Services could impact them.
Insurance companies Aetna, Centene and Kaiser Permanente denied at least one in 10 Medicare Advantage prior authorization requests in 2023, according to an analysis by policy and research organization KFF.
The federal regulators scheduled the changes to prior authorization to roll out in 2026. The changes also compel insurers to provide a specific reason for denial. Insurers will also have to start publicly reporting certain prior authorization metrics each year.
If the new federal rules continue their rollout, payers in 2027 will have to create a prior authorization platform for providers and to regularly update patient portals to include prior authorization request and decision information so that patients can stay informed.
The agency estimated these changes should save about $15 billion over 10 years.
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by Grace Vitaglione, North Carolina Health News
February 4, 2025
Grace Vitaglione is the legislative and aging health reporter at NC Health News. She previously reported on healthcare and the economy at Carolina Public Press, and was the Community Fellow at WHQR Public Media.
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Republish our articles for free, online or in print, under a Creative Commons license.
