Could Texas Law on Limiting Prior Authorization Delays Move the Needle Nationwide?

A new state law in Texas will exempt certain physicians from prior authorization requirements.

The law took effect earlier this month, and is designed to limit delays in patient care by “gold carding” physicians who have a 90% prior authorization approval rate over a 6-month period on certain services, the American Medical Association (AMA) explained.

Physicians who are gold carded will be exempt from prior authorization requirements for those services, meaning that state-regulated insurance companies will not delay patient care, according to the AMA.

It is also possible that the Texas law — the first of its kind in the U.S. — could spur similar legislative efforts in other states, with the medical community additionally supporting federal action to limit prior authorization delays. But the law hasn’t been without pushback from health plans.

“We’re thrilled that there is a law now in Texas that does this,” Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association (MGMA), told MedPage Today.

Gilberg, who is also a member of MedPage Today‘s editorial board, said that gold carding is a “fantastic first step” and “foot in the door” to improving the prior authorization process. MGMA is also pursuing federal initiatives to do so, he added.

Ultimately, there needs to be a “more standardized process across all health plans across the entire country,” he said. Currently, a medical group may have contracts with 20 different health plans, which each have their own prior authorization process. As a result, medical groups may have to hire dedicated staff to address this single issue.

Prior authorization has consistently risen to the top of annual surveys from medical groups regarding the most burdensome regulatory or administrative issues they face, Gilberg noted. However, now that a state as large and important as Texas has passed a law aimed at easing some of that burden, it could have a “domino effect” in other states, he added.

In contrast, America’s Health Insurance Plans (AHIP) expressed concern about the new law in Texas.

“Providers and health insurance providers are already working together to improve the prior authorization process, including greater use of electronic prior auth, as well as gold carding,” James Swann, senior manager of communications at AHIP, said in a statement provided to MedPage Today. “Gold carding relaxes prior auth requirements for providers who demonstrate a consistent pattern of high performance and adherence to evidence-based medical guidelines, but it is not a blanket exemption from all prior auth for an indefinite period of time.”

Swann said that gold carding “may be targeted to specific services, and where used, provider performance can be regularly reviewed to ensure consistently high-quality care and patient safety,” but the Texas law “distorts this concept by mandating broad provider exemptions with no accountability from providers.”

“The use of prior authorization is relatively small — typically less than 15% — and can help ensure safer opioid prescribing, help prevent dangerous drug interactions, and help protect patients from unnecessary exposure to potentially harmful radiation for inappropriate diagnostic imaging,” he added.

The AMA noted that they released a “Consensus Statement on Improving the Prior Authorization Process,” along with several others, including MGMA and AHIP, in January 2018.

In this statement, the organizations said that areas that offered opportunities for improvement included differentiating prior authorization applications based on provider performance, as well as regularly reviewing the list of medical services and prescription drugs that are subject to prior authorization. The organization also pointed to moving toward industry-wide adoption of electronic prior authorization transactions.

However, the AMA said that a 2020 survey by the organization indicated that, even after the consensus statement, prior authorization remained a significant challenge for physicians and patients.

“For credit card holders, it implies that they are reliable borrowers who pay their bills on time,” the AMA wrote. “For Texas physicians, the gold card indicates they consistently meet prior authorization requirements and that state-regulated insurance companies will not delay their patients’ care.”