The $40 million price tag of prior authorizations exposed in new study
Prior authorizations for treatment are a necessary evil in our modern medical system. Without them, patients might not be able to pay for imperative care due to the associated high costs. But a new study presented at ASTRO’s annual meeting this week focuses not on patients' financial burdens, but those of the clinics obtaining such authorizations, specifically in radiation oncology.
Using published compensation data, work-hour estimates and the standard cost of supervisory/physician requirements, researchers were able to come up with the average range for costs associated with a prior authorization (PA) event. The results showed that the average time it takes to complete a PA is between 51-95 minutes, at a cost of $28-$101.
However, significant time and expense increases were noted when PAs required a peer-to-peer review before approval. Those discussions took an average of 92-95 minutes and cost $75-$101. Annually, the study notes that the average departmental cost of PAs exceeds $491,000. Nationally, this equates to a $40,125,848 expenditure for academic radiation oncology practices.
"The sheer magnitude of the cost was surprising. We expected that prior authorization was expensive, but the degree of expense was eye-opening, especially given how often we go through this time-intensive process without significant changes to what we've prescribed," said Brian S. Bingham, MD, chief radiation oncology resident at Vanderbilt University Medical Center in Nashville, and lead author on the study.
Obtaining prior authorizations is vital for those in need of timely treatment, especially for radiation oncology patients. This study makes clear that excess time and money are spent on this process, and suggests clinics should closely re-examine their own PA roadmaps and communication methods with those involved in securing approvals.
You can view the detailed breakdown of the numbers in this study here.
In addition to her background in journalism, Hannah also has patient-facing experience in clinical settings, having spent more than 12 years working as a registered rad tech. She began covering the medical imaging industry for Innovate Healthcare in 2021.