Independence and Penn Medicine have eliminated preapprovals for thousands of high-cost scans

The Philadelphia area’s largest insurer, Independence Blue Cross, has started offering select Penn Medicine doctors a pass on the onerous paperwork typically needed to get patients approved for ultrasounds, CT scans, and PET scans.

Most insurance companies require that doctors get preapproval for certain costly tests and procedures that research has found are commonly overprescribed. The approach is intended to avoid wasting money and ensure patients are receiving medically necessary care.

Leaders at IBC and Penn worked out the new system as a way to get care to patients more quickly and decrease administrative burdens on both sides. Financial savings is expect to be minimal at the beginning.

The pilot program covers 1,280 physicians employed by Penn at the Hospital of the University of Pennsylvania, Pennsylvania Hospital, Presbyterian Medical Center, and Chester County Hospital.

To be included, doctors had to have a 12-month history of ordering the scans and a coverage denial rate of less than 2% with Independence, a signal that they are usually following IBC’s criteria for deciding what scans it will pay for. Penn said it expects the new arrangement to eliminate prior authorizations for 24,000 imaging tests annually.

Rodrigo Cerdá, IBC’s chief medical officer described the exemption from pre-authorizations as “a privilege that we’re really hoping helps make a huge difference for Penn docs and for our patients.”

If the program is successful, meaning physicians continue ordering scans appropriately, IBC wants to expand it to other health systems, Cerdá said. He said the insurer is testing the new approach with Penn because its doctors have lower denial rates than doctors at local competitors. Penn said its denial rate in imaging is about 2%.

Under the program, Penn is on the hook financially if its doctors start ordering notably more scans that don’t meet IBC’s guidelines. IBC pays thousands of dollars each for some of the scans.

The IBC-Penn pilot is part of a trend toward rethinking health insurance pre-authorizations, aiming to streamline and bring more transparency to the process, said Kaye L. Pestaina, codirector of the Kaiser Family Foundation’s program on patient and consumer protections.

“It makes sense that you would focus on things that we know are often approved,” Pestaina said.

That impulse tracks with the recent decision by the nation’s biggest health insurer, UnitedHealthcare, to shorten its list of medical procedures and devices that must go through prior authorization, the Wall Street Journal reported last month.

And this month, the Centers for Medicare and Medicaid Services issued revised rules for prior authorization under Medicare Advantage. The changes are designed to ensure timely access to medically needed care, regulators said, but did not entirely eliminate pre-authorizations, which are supposed to ensure that money isn’t wasted on unneeded treatments.

Some states, including Texas, have passed laws that exempt doctors from prior authorizations if they meet specific compliance standards.

Penn Medicine has 50 full-time slots for people who spend all their time trying to get prior authorizations from insurance companies. Sometimes they have to arrange for doctors to speak with an insurance company’s physician who has a question about why a request should be approved.

Eliminating IBCs prior authorization requirements for high-cost imaging won’t lead to job cuts, said Mitchell Schnall, Penn’s chair of radiology. “We have lots of things for those people to do. Trust me. People with that skill set, nobody’s losing their job over this.”

More important is getting patients care more quickly and cutting back on wasted time, Schnall said. Sometimes a doctor will schedule a scan five days out, assuming that’s enough time to get the precertification, but if there’s a delay Penn has to call the patient the night before to cancel.

That’s bad for the patient, who may have taken time off work. It’s also a loss for Penn, Schnall said. “We now have an open slot that we can’t fill because we can’t pre-authorize anyone in that short a period of time,” he said.

IBC and Penn did not consider taking away all the checks on how doctors order high-cost tests.

“If IBC were to say, we’re just not going to monitor them any more because they are doing well, they will drift and start to order studies that may not be as well indicated,” Schnall said. “That’ll raise health-care costs for everybody.”

Doctors in the program will receive a quarterly report card on how well they are complying with American College of Radiology guidelines. Doctors not included at first because they had too many denials over the last 12 months will be able get into the program if they improve their performance. Those who stray will lose the benefit of not needing pre-authorizations.

Penn is measuring “the use of these tests and if that sort of balloons up then we will probably have to stop and go back to traditional pre-authorization,” Schnall said, “but we’re pretty confident that we’re going to be able to manage this.”