The Battle Over “Prior Authorization”

Organized medicine in the state of North Carolina is attempting to get the General Assembly to limit in various ways the requirements for “prior authorization”. This is the process that requires doctors to get the approval of health insurance companies before proceeding with expensive diagnostic tests, treatments or procedures.

The process is fraught with difficulty. It is expensive, troublesome and time-consuming for doctors. It leads to delays in diagnosis and treatment. And insurers sometimes do not make the right decision.

This requirement, however, is the natural conclusion of our system of health insurance in which a third party pays the bills. The patient and provider are insulated from the consequences and the costs when the perception is that the insurance company will pay.

Without this prior authorization requirement, doctors will tend to offer these procedures, treatments and tests in more of an indiscriminate manner. Moreover, without this requirement, patients and their families will demand them prematurely or when they are not truly justified. These things happened routinely before prior authorization requirements became commonplace.

However, one thing has changed over the last 10-15 years. More people face deductibles than in the past. These deductibles act as somewhat of a check on the tendency to do too many tests or procedures or to excessively demand them.

We live in a fallen, imperfect world in which everyone expects and feels entitled to the insurance company paying for everything, and to getting everything they want. The best solution to the whole issue is for deductibles to be much higher than they have typically been in the past. Then, prior authorization requirements would be less necessary because physicians and patients would be more restrained with respect to pursuing things that are unwarranted.

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