Testimony by Patricia Kolodzey, associate director, Legislative Affairs for TMA
House Insurance Committee
Committee Substitute House Bill 1604 by Rep. Sarah Davis
April 23, 2013
Good afternoon, Chairman Smithee and members of the committee. My name is Patricia Kolodzey, and I am the associate director, Legislative Affairs, for the Texas Medical Association. On behalf of the Texas Medical Association (TMA) and more than 47,000 physicians and medical student members, I would like to thank Chairman Smithee and committee members for the opportunity to testify in support of the committee substitute for House Bill 1604.
Texas physicians and their office staff support HB 1604 because it will help physician practices help patients receive their necessary medical and health care services in a timely manner and with less administrative hassle and complexity. HB 1604 provides for the creation of a uniform standard prior-authorization request form for the authorization of health care services, with input from a stakeholder workgroup to be formed at the Texas Department of Insurance. Once the standard form is developed, it will be required to be used across insurers and health benefit managers.
In physician practices, the administrative cost of dealing with health plans is a major and growing factor in the cost of medical care. Health Affairs published a study in 2011 that illustrated the cost of staff interacting with health plans is $82,975 per physician per year. Add in the cost of office supplies and equipment, and the cost climbs above $100,000 per physician per year.
Data shows that, on average, the handling of pre-authorizations alone requires one full-time staff nurse to support every three physicians, in addition to the time spent by physicians and other staff. Reducing administrative cost can reduce medical costs for everyone.
The bill doesn’t prohibit the use of established electronic authorization forms or processes used by some insurers today. However, the bill does require in the event a paper form is used, the standard form agreed to by the stakeholders is the one used across all payers.
Physician practices have contracts with these:
- One or more of the big five insurers: Aetna, BCBSTX, Cigna, Humana, and United;
- Multiple smaller local plans;
- Various Medicaid managed care plans;
- Various Children’s Health Insurance Program plans;
- Workers’ comp;
- The State Employee Retirement System; and
- The Teacher’s Retirement System.
You might be thinking this means there are only eight or so different prior-authorization forms physicians and their staff need to be familiar with and complete. The fact is, each and every insurer, managed care plan, or program I mentioned has different and sometimes multiple prior-authorization forms for their enrollee’s health care services — AND these forms are in addition to all the multiple prescription drug authorizations you heard about in testimony for House Bill 1032 by Rep. John Zerwas.
Even though the prior-authorization forms for all the varied health care services might be similar to some degree, they each ask for something a little different. In addition, sometimes a separate form is needed for various health care services that require prior authorization such as:
- Specialty consultations;
- Surgical procedures;
- High-dollar radiological procedures (CT, MRI, scans);
- Home health services;
- Rehab services (both inpatient and outpatient including physical therapy, occupational therapy, and mental health therapy); and
- Durable medical equipment (e.g., wheelchairs, oxygen equipment).
If you multiply each one of these by five, for just the major insurers, you can easily get the picture, and we did not even include what the utilization review agents require. In addition to knowing which prior-authorization form to use for any given patient’s need and before a prior authorization is requested, the physician and staff have to know:
- Whether or not a prior authorization form is needed,
- The patient’s benefit design — does it require prior authorization for certain services? and
- Each insurer’s or health plan’s specific list of health care services requiring prior authorization.
Depending on the patient and the insurer’s authorization requirements for that patient, this can require a different form or forms for every patient seen in the office on any given day. Asking for a two-page standard form we thought to be a good compromise. Some insurer forms are up to as many as five pages (Attachment K), and that doesn’t include the clinical information that might need to be attached.
Some insurers have done a good job of consolidating the information they need to one page for most of the various health care services mentioned needing authorization, including some workers’ comp carriers (Attachments I and J). If additional information is needed, their form allows for the inclusion and attachment of the necessary clinical information to support the request — but the form itself for completion is one page. These insurers and carriers could certainly “lead by example” in the stakeholder workgroup since they have already proven this is neither an impossible task for them nor an impossible ask by physicians and providers.
This bill decreases the variability of authorization forms to be completed and subsequently decreases the administrative time and burden. Your support for this bill means giving patients, and that includes you and your constituents, health care services in a more timely and efficient manner.
Again, thank you for the opportunity to testify today. I would be happy to answer any questions.
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