When Prior Authorization Leads to Harm Caused by Delayed Care

In March 2023, the American Medical Association (AMA) released the results of a survey conducted on the impact of health insurance prior authorization (PA) on patient care and outcomes.

The survey results revealed shocking information about the extent to which health insurance companies control the type of medical care patients receive.

At Thomas Law Offices, we believe that medical decisions should be made by those with medical expertise. If you suffered an adverse health outcome because of the interference of a health insurance company’s cost-saving practices, it may have been an instance of health insurance bad faith.

The purpose and duty of an insurance company is to protect the policyholder—and actions that go against this basic obligation are illegal. If you or a loved one suffered an experience like this, please schedule a confidential, no-cost case evaluation with an insurance bad faith lawyer on our Chicago legal team to learn more about your options.

What Is Prior Authorization (PA) in Health Insurance?

Prior authorization (PA), also called precertification or prior approval, refers to a common practice among health insurance companies. This practice requires physicians and other health care providers to obtain approval from the health insurance agency before the company will pay for certain services. Services may include prescription medications, tests and exams, surgery, biopsies, and other medical interventions.

Although it is purported to be a way for health insurance companies to reduce frivolous costs for procedures that are not medically necessary, it is the position of the AMA that “the overall volume of medical services and drugs requiring prior authorization should be greatly reduced.”

It’s fairly easy to see how a practice that’s supposed to be beneficial and cost-reducing can quickly turn into a way for the insurance company to have full control over what it feels like paying for and what it doesn’t.

What Do Doctors Think About Insurance Prior Authorization?

The results of the 2023 AMA survey speak loudly about the opinion of medical professionals in regard to prior authorization. We’ve selected just a few of the statistics that show that the majority of physicians do not think PA is beneficial to patients. In fact, most believe the opposite to be true.

Among the physicians surveyed:

• 89% believe PA has an overall negative impact on patient clinical outcomes
• 33% reported at least one serious adverse event caused to a patient because of PA
• 94% say that prior authorization delays patient access to necessary care to some degree
• 80% report that PA sometimes causes patients to abandon the recommended course of treatment
• 25% say that PA has led to a patient’s hospitalization at least once
• 19% have seen a patient face a life-threatening situation or require further medical intervention because of PA
• 9% saw a patient suffer a disability, permanent bodily harm, a birth defect, or death due to PA
• 31% believe that the data used by health insurance companies to make decisions are not rooted in evidence-based medicine (100% of insurance companies claim it is)

Health Insurance Practices That Control Patient Access to Medical Services

The term “utilization management” (or “utilization review”) encompasses the variety of techniques and procedures that health insurance companies use to determine whether a treatment is appropriate and necessary, and, thus should be paid for by the company.

Using a complicated set of methods that claim to evaluate evidence-based research and medical data, utilization management is, in theory, a way to improve the quality of health care, reduce unnecessary expenses, and make sure patients receive the care and treatments that are best for them.

However, the prevalence of these practices in today’s health care system has led to an environment in which insurance companies are regulating what treatments patients can receive. Doctors are being forced to argue their medical decisions to insurance companies. We’re seeing a climate in which physicians must use their time and effort to persuade businesses to pay for expenses the company doesn’t want to pay for. And many times, the process is blocking patients from getting the care they need, when they need it.

In addition to PA, other utilization management techniques insurance companies use to cut costs include:

• Precertification that determines how long a patient may stay in a hospital
• Concurrent review to decide which tests and procedures are medically necessary when a patient is hospitalized or receiving care for a condition
• Step therapy that tries out less expensive options before “stepping” up to more expensive ones
• Non-medical switching that swaps a cheaper drug for one that is already effective
• Retrospective review to determine if a therapy or treatment already received should be covered

The theory behind these practices may be to cut costs and eliminate unnecessary medical interventions, but that doesn’t seem to be what is happening. Not only are patients facing roadblocks on the way to recovery, but PA practices are also wasting resources, according to the AMA and other recent studies on the topic.

Well over half (64%) of surveyed doctors admitted that PA rules forced them to try ineffective treatments before they were allowed to give patients the treatment they knew was most effective.

These “step therapy” methods of treatment often require medical care providers to exhaust all the cheapest options before they are allowed to give the patient what they know will actually cure them. Doctors are forced to go against their judgment, and valuable time, staff labor, and medical supplies are wasted in these efforts. Roughly 62% of physicians stated that PA led to additional office visits, and 46% treated patients who had to be administered emergency medical care because of the critical health condition they were put in by PA practices.

In the worst-case scenarios, patients suffer a worsened condition, permanent disability, or death because they do not receive the right course of treatment in a timely manner.

How Often Do Doctors Need To Get Prior Authorization From an Insurance Company?

Fulfilling PA duties has become a full-time job at most doctors’ offices.

It may seem impossible that a physician who spent nearly a decade in medical education would be obligated to have their decisions authorized by an insurance employee with no medical training whatsoever.

That, however, is the grim reality of a medical system so tightly gripped by the interests of big insurance conglomerates. According to the AMA report:

• Physicians and staff spend an average of two business days every week completing PAs
• 88% of doctors describe the burden imposed by PAs as “high” or “extremely high”
• A medical practice fills out an average of 45 PAs per physician per week
• 35% of doctors hire staff members whose only job is to work on PAs

If these statistics seem alarming to you, you aren’t alone. There is something seriously amiss when a doctor is required to spend two out of five business days each and every week seeking prior authorization for necessary patient health care.

What Can You Do if Insurance Pre-Authorization Practices Harmed You or a Loved One?

When prior authorization leads to harm caused by delayed care, the negative impact on the patient and their family is immeasurable. There is no consolation that can be offered to someone who was permanently disabled because the insurance company required the physician to waste time before they could administer the right treatment.

If a health insurance company deliberately puts profits above patients, resulting in an adverse health outcome, they may be guilty of bad faith. Insurance companies that engage in acts of bad faith can be held liable through a bad faith claim—the legal means injured policyholders in Illinois have to recover their rights.

We must state with emphasis that these types of cases are extremely difficult. It is absolutely critical that you partner with a highly experienced attorney who can guide your case to a favorable conclusion. Many law firms do not handle these cases, so it is important that you identify an attorney with the ability to take on Chicago prior authorization bad faith health insurance cases and win.

We invite you to discuss your case with Thomas Law Offices to see how our skills align with your needs.

Our experienced legal team will meet with you for a free consultation. If we mutually agree to move forward with your case together, we are able to take most cases on a contingency fee basis, meaning we won’t charge any attorney’s fees until your case is won.

Please contact us online or by phone to schedule our first meeting.