Statement: CMS President on prior authorization reform bill

Wednesday, May 15, 2013 03:43 PM
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Statement attributable to Jan Kief, MD, Colorado Medical Society president

I am here today to congratulate Senator Irene Aguilar and Representative Joann Ginal for successfully passing SB13-277 and to thank Governor Hickenlooper for signing the legislation. Our support for SB13-277 was about three simple concepts:

  1. First and foremost, assuring that patients receive timely access to necessary and appropriate medications.
  2. A very basic form of standardization across health plans and pharmacy benefit managers.
  3. Less red tape and more real-time care.

Prior authorization (PA) is an administrative process that requires clinical input that some insurance companies and pharmacy benefit managers require before they decide if they want to pay for a patient’s medicine, test or procedure. It is estimated that PA is used on up to 8 percent of all medications. The prior authorization process is an important utilization and cost management tool that does help control some health care costs.

The problem is that each health plan has its own set of PA authorization forms, formularies, list of medications that require PA and clinical indications for approval or denial. We most strongly support SB13-277 because of the compelling need for standardization and simplification in the prior authorization process. Our case for this compelling need is not anecdotal or new. Last year, CMS passed a resolution at the Annual Meeting of the American Medical Association resolving that our national organization play a leadership role in automating, standardizing and simplifying all administrative actions required for transactions between payers and providers, not just prior authorization. Studies estimate that a minimum of $55 billion is wasted annually in unnecessary administrative costs.

A survey conducted by CMS from Dec. 14, 2011 – Jan. 10, 2012 shows:

  1. Colorado physicians have decidedly negative views of the PA process for tests, procedures and medications. Just 11 percent of respondents say things are “working fine,” and only 3 percent believe more PA is needed. Almost one-half of respondents believe that there should be “some decrease” or “much less” prior authorization, while 15 percent believe PA should be eliminated.
  2. Two-thirds of physician respondents (64 percent) believe that insurance company requirements like prior authorization, therapeutic switching and pre-certification are having a negative impact on their ability to treat patients, with 22 percent saying they are “very” negative and another 42 percent saying they are “somewhat” negative.
  3. The survey demonstrates that solo practitioners, those in small-to-medium practices and physicians employed by hospitals are most likely to have negative views on the impact of PA.
  4. Finally, fully 65 percent of respondents support a standardized PA form being mandated by law.


CMS supported this legislation because it will:

  • Inspire change through a collaborative process.
  • Provide patients in need of medically appropriate care with the medicines they need in a more timely fashion.
  • Reduce the administrative complexity of the PA process because:
    • PA approvals, denials and requests for additional treatment data will be answered more promptly.
    • The widely differing PA processes across health plans and PBMs will be streamlined and more efficient.

Click here to view the statement as a PDF.


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