New Prior Authorization Tool Reduces Chemotherapy Costs and Number of Denials

Prior authorization adds an administrative burden for provider practices and can delay the initiation of therapy to patients. The process can involve lengthy telephone conversations with insurance companies and nontransparent rules, often leaving physicians in the dark as to which therapies will or will not be covered, which can result in high denial rates.

The American Medical Association (AMA), the American Hospital Association, and 14 other healthcare organizations announced in January that they joined forces to help streamline prior authorization for medical tests, procedures, devices, and drugs to reduce administrative waste and save time.

In a December 2016 survey of 1000 physicians conducted by the AMA about prior authorization:

  • 75% of respondents reported that the burden associated with prior authorizations was high or extremely high
  • 64% reported that they do not have staff members who work ex­clusively on prior authorizations
  • 44% reported that the prior authorization often or always delays access to necessary care; 46% said it sometimes delays
  • 23% reported completing more than 40 prior authorizations in the past week
  • 22% reported that it took more than 20 hours to process prior authorizations in the past week.

In line with this new AMA survey, oncology practices may be glad to hear about a new computer-based prior authorization tool that incorporates clinical treatment guidelines and was shown to reduce the total cost of chemotherapy drug treatment and the number of denials.

New Tool to Process Prior Authorization Requests

Using a digital version of the National Comprehensive Cancer Network (NCCN) guidelines for oncology drugs and biologic agents, the new prior authorization tool provided oncologists with real-time decision support, based on the tumor type, tumor stage, genetic tests, drug combinations, and line of therapy, according to Lee N. Newcomer, MD, MHA, UnitedHealthcare, Minnetonka, MN, and colleagues, who reported the results of their recent study.1

The tool obtained just the right amount of information to reach a treatment-decision node for a specific cancer, and unlike traditional prior authorizations, which merely let physicians know whether a treatment will be covered or not, this new tool lists all NCCN-recommended treatment regimens, and offers alternative treatment options if the initial request does not align with the NCCN treatment guidelines.

“The system was intentionally built to find a solution for patients if one was available. Oncologists were shown all NCCN-recommended regimens for their patient’s specific clinical parameters at the time of the request; it was functioning as a decision-support tool,” according to Dr Newcomer and colleagues.

The tool was assessed by UnitedHealthcare, using data from its commercial and Medicaid members. Chemotherapy drug costs between January 1, 2014, and September 1, 2014, served as baseline costs and were compared with chemotherapy costs between January 1, 2015, and September 30, 2015, using the per-member per-month costs to adjust for membership changes. The costs were examined in (1) Florida; (2) across the United States, excluding Florida; and (3) in the southeast region, excluding Florida, before and after the launch of the computer-based prior authorization tool.

The New Decision Support Tool

Of the 4274 eligible prior authorization cases in Florida, 4211 were approved, and only 1% of cases were denied, suggesting that “an acceptable alternative was readily available,” Dr Newcomer and colleagues observed. Furthermore, 58% of the prior authorizations received immediate approvals online, without requiring further interaction with the payer.

During the launch of the new prior authorization tool, the chemotherapy per-member per-month cost trend for the nation (excluding Florida) and the southeast region (excluding Florida) increased by 10% and 11%, respectively. By contrast, the chemotherapy cost trend decreased by 9% in Florida, representing a $5.3-million savings with the use of the new tool. The team attributed the large difference in the cost trend between Florida and the rest of the nation to “the additional review details of drug combinations and line of therapy, combined with offering an immediate NCCN-compliant alternative.”

Practical Implications

Given the increasing cost of cancer care, these data have important practical implications. For oncology practices, this tool can help to reduce the administrative burden on providers and on practice managers. Furthermore, the cost-savings associated with the new prior authorization tool can be used to fund new treatments, by eliminating the unnecessary or minimally effective treatments.

The new decision support tool can also be used to improve cancer therapy by collecting real-world patient data, including the total cost of care, hospitalization rate, and the duration of therapy before disease progression or toxicity—all of which can be used to compare the performance of different therapies.

In addition, payers and providers can use these data to negotiate performance pricing from pharmaceutical manufacturers, as well as inform prospective phase 3 clinical trials that would be most valuable for future policy decisions.

“This project provides evidence that it is possible to reduce the cost of cancer therapy using evidence-based decision making. Policymakers, payers, patients, and oncologists can all benefit from future strategies that divert funding from marginal therapies to more effective treatments,” concluded Dr Newcomer and colleagues.


  1. Newcomer LN, Weininger R, Carlson RW. Transforming prior authorization to decision support. J Oncol Pract. 2017;13:e57-e61.

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