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How prior authorization reform earned Gov. Scott’s signature despite pushback from health insurers

A hand holding a pen is about to fill out a health insurance form.
Gov. Scott signed the prior authorization bill on Monday, May 20. Health insurance provider BlueCross BlueShield said the move could increase rates by roughly 6%.

Recently, Gov. Phil Scott gave his signature to legislation that was a top priority for health care providers across Vermont.

The bill allows primary care doctors to order treatments, tests and certain medications for their patients without first seeking what is known as prior authorization from the patient’s insurance company.

Vermont Public's Bob Kinzel recently sat down with Morning Edition host Jenn Jarecki to discuss how this bill worked its way through the legislative process — and how it could impact patients. This interview was produced for the ear. We highly recommend listening to the audio. We’ve also provided a transcript, which has been edited for length and clarity.

Jenn Jarecki: So Bob, the Vermont Medical Society, which is a group that represents over 2,900 doctors and physician assistants in the state, was really pushing for this bill during the legislative session. Can you tell us why that is?

Bob Kinzel: Absolutely. You know, I think there's a strong feeling among many health care providers, that prior authorization can really delay cost-effective treatments for their patients. And these delays are frustrating and time-consuming. Milton pediatrician Dr. Kristen Connolly explained it this way:

Kristin Connolly: These unnecessary prior authorizations and frequently changed medication formularies are not motivated by improving patient care or reducing patient costs. In fact, many are not even consistent with clinical guidelines. The effects on patients and risks to patient health are tremendous.

Bob Kinzel: And Jenn, what makes this situation even more frustrating from the point of view of the providers is that the various insurance companies have different regulations. So things can get very complicated very quickly.

Jenn Jarecki: I think a lot of Vermonters have horror stories about health care bureaucracy under the current system, all the paperwork doctors and their staff have to fill out. I mean, does that play into this as well?

Bob Kinzel: Absolutely Jenn, there's no question that this is a major concern. Essex Rep. Alyssa Black is the lead sponsor of this bill. And she expressed these concerns on the House floor.

Alyssa Black: No other issue garners as much attention and support as reducing the paperwork barriers that come between clinicians and providing good patient care. We took testimony from providers that indicated that they spend as much as two hours a day on paperwork. That is two hours that they are not seeing patients. 

Bob Kinzel: Jenn, this is a major concern that a number of primary care physicians talked to me about. It's a big, big deal for them.

More from Vermont Public: Gov. Phil Scott signs prior authorization bill after push by health care advocates

Jenn Jarecki: Bob, do doctors feel that they know what is best for their patients? And do they not want the insurance companies second-guessing them?

Bob Kinzel: Jenn, I think that's a really big part of it. Jessa Barnard is the executive director of the Vermont Medical Society, and this is what she told me:

Jessa Barnard: I think there is a piece of this bill that's about: Are these decisions that are made in the hands of your health care provider who knows you and sees you year after year, or by your insurance company?

Bob Kinzel: And Jenn, the doctors also mentioned how much time it can take if their initial recommendations are rejected by the insurance company, and then they have to file an appeal and sometimes, a second appeal. And this just adds another layer of frustration to this entire process.

Jenn Jarecki: Well, how do the insurance companies respond to that concern, you know, that doctors feel they have to justify their treatment decisions for patients?

Bob Kinzel: Well, this is a point of great disagreement between many providers and the insurance companies, as you might expect. BlueCross BlueShield spokesperson Sara Teachout told me that the company is really not trying to second guess the recommendations that the providers are making.

Sara Teachout: We see our role is supporting the doctors, offering additional information and alternatives. I think we're not trying to second guess the doctor, but really collaborate with them to come up with a, you know, a treatment plan that is both effective and cost-effective.

Bob Kinzel: And Jenn, BlueCross argues that there are cases where their review has resulted in better outcomes for patients — have been effective in controlling costs — and this helps keep rates lower.

Jenn Jarecki: It seemed like this bill underwent some important changes as the House and then the Senate worked through it. Bob, can you tell us how they impacted the scope of the final bill that's been signed into law?

Bob Kinzel: Sure, Jenn. The scope of the bill really did evolve as it worked its way through the legislative process. Now, right at the outset, the House version used Medicaid regulations to limit prior authorizations for all providers. So, some rules would still have been in place. It passed on a vote of 137 to zero. That doesn't happen very often at the Legislature. And that was despite BlueCross saying it could increase rates by roughly 6% all by itself.

Now, when the Senate considered the bill, it focused instead on just primary care physicians. And rather than use the Medicaid guidelines, it just lifted at all limits on prior authorization for this specific group of providers. Addison Sen. Ruth Hardy said that change made sense, because 90% of all prior authorizations are ultimately approved. But it sometimes takes months to get this approval.

Ruth Hardy: Really what's happening is that prior authorizations are not saving money, they are delaying care. And they are causing an administrative burden on our health care providers.

Bob Kinzel: Jenn, I've got to tell you, that comment really irked Sara Teachout of BlueCross.

Sara Teachout: You know, I think that's really unfortunate. BlueCross BlueShield of Vermont does everything we can to, you know, improve patient safety, rein in costs and make sure that the care that's being provided is appropriate for the situation. We never want to deny care for our members. That's not good for people, and we know that.

Bob Kinzel: Jenn, the Senate then gave its approval to the bill. The House supported those changes that the Senate made. It went to Gov. Phil Scott, and he signed the bill.

Jenn Jarecki: Well, insurance companies argue this bill will lead to greater use of the health care system, which could lead to higher premium rates at a time when they are already proposing double-digit rate increases for many small businesses. How are other stakeholders reacting to that concern?

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Bob Kinzel: That's a concern that's come up both on the House and Senate floor and something that the governor raised when he signed the bill.

Now, backers of the bill say it will actually reduce costs by providing less expensive and more timely care. Scott has directed state regulators to review the impact of the bill after its first year in operation so there can be some specific data available about how it's being implemented.

Gov. Phil Scott: So we can track to see what the long-term effects are of this — short and long term. Whether it costs more money, or whether we save money by doing this.

Bob Kinzel: And Jenn, state regulators will also study the impact that similar laws have had in Massachusetts and New York state. This bill will become law on Jan. 1, 2025. That's a time when many health care policies are renewed for the coming year.

Have questions, comments or tips? Send us a message.

Bob Kinzel has been covering the Vermont Statehouse since 1981 — longer than any continuously serving member of the Legislature. With his wealth of institutional knowledge, he answers your questions on our series, "Ask Bob."
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