Massachusetts health insurers will face new restrictions around the much-maligned practice of prior authorizations, eliminating the red tape around how patients access some drugs and services, Governor Maura Healey said Wednesday.
Healey announced at the State House that the Division of Insurance will establish regulations to eliminate any insurer permissions required for many routine and essential services. The changes, along with some other reforms, take aim at a practice that’s long drawn the ire of many consumers upset over insurer denials.
Though insurers call prior authorizations an essential tool they use to control spending, Healey suggested the changes will lower health care costs by reducing the administrative burdens medical providers face.
“Health care is too difficult and too expensive for far too many people,” said Healey, who has made affordability a key issue on the campaign trail in her reelection bid in this November’s election. “So we are taking the most comprehensive action in the country to make it faster, cheaper, and easier to get the care you need.”
Healey also announced a new working group focused on health care affordability that will include leaders in business, health care, insurance, and labor.
The announcement is the second Healey has made around health care in the last two weeks that she has positioned as “nation leading,” to some skepticism. Last week, she announced that a $250 million state trust fund would help Massachusetts residents confronting skyrocketing premiums for insurance from the Affordable Care Act marketplace.
Healey unveiled the changes at a time when she and Democrats nationwide are building their reelection efforts on a promise to make life more affordable for residents. Healey ran on a similar vow four years ago, and as she fends off Republican challengers who’ve hammered the state’s high cost of living, she has repeatedly elevated her efforts to address it, be it through the trust fund, a 2023 tax relief package she signed, or a sweeping housing law.
The new Health Care Affordability Working Group will be led by former Health and Human Services secretary and former Boston Medical Center CEO Kate Walsh as well as Lisa Murray, Massachusetts state president at Citizens Bank.
Updated insurance regulations will effectively eliminate the prior authorization approvals for emergency and urgent care services, primary care, chronic care, occupational and physical therapy, and certain prescription drugs.
Under the current process, doctor’s offices sometimes encounter prior authorization requirements for certain services or drugs in order for them to be reimbursed. Response times vary by insurer. For the state’s largest insurer, Blue Cross Blue Shield of Massachusetts, response times are one to two days on average for urgent requests. Approximately 85 percent of decisions are reached within 10 days, the insurer said.
The new regulations will also require insurers to respond to urgent requests within 24 hours, and ensure patients’ care isn’t disrupted when they switch insurance plans.
The regulations will apply to all insurers that do business in Massachusetts. They will not apply to “self-insured” employers that pay health care claims directly — the majority of the commercial market. That means large employers could still choose to require prior authorizations in the areas Healey has restricted.
The shifts will make a meaningful difference to some patients. For example, a patient with diabetes will no longer need a prior authorization for any service, state officials said, including devices and drugs associated with their chronic disease.
For other patients, the changes may be less consequential. The regulations solidify commitments many insurers have already made around prior authorization.
For example, Blue Cross Blue Shield of Massachusetts does not have any prior authorizations for inpatient acute care, urgent care, emergency care, or primary care.
And in June, a slate of insurers — including Blue Cross Blue Shield of Massachusetts and Point32Health — announced commitments to reform prior authorizations. Among the changes: when a patient’s insurance changes during a course of treatment, the new plan would honor existing prior authorizations for equivalent, in-network services for 90 days instead of immediately requiring a new one.
The new regulations seem to codify that approach. Under the updated rules, Healey’s team said a patient with rheumatoid arthritis who has an existing authorization for treatment but who switched to a new insurer will have the approval honored for at least three months.
Standardizing and restricting prior authorization use will improve access to care and lower health care spending, as hospitals and providers won’t have as much administrative burden, the administration said. The Council for Affordable Quality Healthcare, based in Washington, D.C., said the health care industry nationwide spent $1.3 billion on administrative costs related to prior authorizations in 2023 — a 30 percent increase from the previous year.
Other analyses, however, have suggested prior authorizations help constrain health care spending. A 2023 report by Milliman, commissioned by the insurance trade group the Massachusetts Association of Health Plans, said eliminating prior authorizations would lead to increases in health care spending by $600 to $1,500 per member annually.
“Prior authorization is not merely an administrative process; it is a core affordability safeguard that promotes evidence-based care, curbs unnecessary utilization, and protects patients and purchasers from avoidable costs,” said Lora Pellegrini, the association’s CEO, in a news release.
Regardless of spending ramifications, the changes have the potential to bring about meaningful change to patients often caught in the middle.
At Healey’s news conference, a patient identified only as Melissa described trying to access a critical drug after being diagnosed with a serious autoimmune neurologic illness. The disease caused significant weight loss, cognitive dysfunction, hormonal disruption, damage to her tissues, and the shutdown of her basic bodily functions. While she waited three months for insurance approvals, her condition deteriorated. She teared up as she recounted the permanent harms the disease caused to her body and functioning during the wait.
“For a patient in the world of neurology, [with an] illness like mine, three months is like three years,” she said. “Why do I have to wait those three months and suffer that damage?”
Dr. Paul Hattis, a senior fellow with the health care think tank the Lown Institute in Needham, said prior authorizations aren’t going away in their entirety, and questioned how much health care spending would increase or administrative burdens would be reduced by doing away with approvals in these specific areas. But he applauded what the changes would mean for consumers, whose care would no longer be complicated by delays.
Healey’s new working group will also develop proposals to make health care more affordable.
The group’s members feature representatives from a number of state agencies along with a bevy of trade groups, including the Massachusetts Health and Hospital Association, Massachusetts Medical Society, Massachusetts League of Community Health Centers, Massachusetts Biotechnology Council, Massachusetts Nursing Association, and the Massachusetts Association of Health Plans. Business groups from the Retailers Association of Massachusetts and the Massachusetts Business Roundtable are also members.
Healey said she hoped to receive some recommendations from the group by June.
The state has previously created similar task forces focused on health care issues, with middling results. The Provider Price Variation Group was formed in 2016 to look at the different reimbursements health systems received for the same services. Though a report was produced, little change occurred.
The state’s health care watchdog, the Health Policy Commission, has spent over a decade studying and recommending legislative changes to reform health care and control ever-rising spending, with varied success.
Though the new group seemed to be the latest looking at health reform, Hattis was optimistic the work would finally result in real change.
“It will be different this time,” Hattis said. “The affordability challenges now are so great and getting greater that I don’t see how our Legislature can rationally sit by and do nothing and say they are doing the work needed on behalf of the Commonwealth.”
Globe reporter Matt Stout contributed to this reporting.
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