Should Doctors Charge Patients for Prior Authorization?

Some physician practices are charging patients for prior authorization requests or requiring annual administrative fees for such requests and letters of medical necessity, among other services.

In February, patients at one Washington, D.C.-based practice received an email stating that due to the increasing administrative burden on physicians and staff, “a $50 fee will be assessed” for each request to draft a letter or process a medication prior authorization.

Meanwhile, a specialty practice in New Jersey requires office visits for some prior authorization requests to help complete the paperwork accurately.

A physician who asked not to be named told MedPage Today that having a physician or physician assistant work with the patient rather than a non-clinician avoids delays. The practice also sometimes schedules peer-to-peer calls with health plans to coincide with patient visits.

“Having [the patients] there just listening to the process … I think they start to realize that it’s really not the doctors, it’s really the insurance industry that’s causing their grief,” the physician said.

Medication prior authorizations and other requests not requiring clinical information are frequently excluded from the requirement, but for patients for whom an office visit is required, there can be a copay, he noted.

In 2024, Alex Shteynshlyuger, MD, of New York Urology Specialists in New York City, floated a different idea: establishing a Current Procedural Terminology (CPT) code to charge insurers for the requests.

He asked the American Medical Association (AMA) CPT Editorial Panel to clarify whether it’s allowable to charge for an extended visit length if it takes 30 minutes for the visit and another 60 to do a prior authorization.

“And the answer has been no,” he said.

However, it does make sense for patients to pay for these services, just as they do pharmacy services, Shteynshlyuger noted. At the pharmacy, “they pay for the actual medication, but it also includes the cost of filling the medication.”

Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association, said he is “deeply sympathetic” to physicians and practices enduring the constant burden of prior authorization requests.

“Many practices [particularly primary care practices] have dedicated staff just to do authorizations all day long, but … they’re just doing it for a referral. So they’re not getting paid for the service they’re authorizing,” he explained.

Still, the idea of recouping that lost time and expense, particularly by charging patients on Medicare or Medicaid, is “very risky,” Gilberg said. Prior authorization fees are considered part of the practice expense relative value units and some contracts, even commercial contracts, might “explicitly prohibit” them.

Any practice considering this type of policy should have an attorney review commercial contracts and relationships with federal or state payers and programs, he added.

The American Academy of Family Physicians also urges practices to review their payer contracts before billing patients for these types of services. Some concierge practices charge monthly and annual fees “to cover services such as care coordination, improved access, and administrative work (e.g., prior authorizations),” and organizations exist to help practices transition to those models.

As for the impact on patients, Gilberg said “any additional fees … potentially could deter them from pursuing various treatments or drugs.” Practices should bear in mind the potential “blowback from patients,” such as bad online reviews and competition from other practices, he cautioned.

Still, many practices don’t have any other option but to require new charges, and many practices, particularly primary care, are switching to a concierge model. “That’s obviously much worse for patients,” Gilberg said.

A spokesperson for the AMA said it hasn’t studied “emerging administrative charges,” adding that “there’s no information available on how common these fees are or what practices are charging them, but cost relief rests with real prior authorization reforms.”

Physicians handle nearly 40 prior authorization requests every week, according to AMA President Bobby Mukkamala, MD. That’s time spent away from patients, and adds to the financial strain on practices, he said.

“The most effective way to lower administrative costs is to cut down on unnecessary prior authorizations and streamline the inefficient processes insurers require,” Mukkamala noted.

A spokesperson for AHIP (formerly America’s Health Insurance Plans) told MedPage Today that “health plans are doing their part — leading the way to improve this vital patient protection tool by streamlining prior authorization to connect patients with care faster, reduce provider burden, and modernize a fragmented system.”

While insurers promised to simplify the system and make it less burdensome last year, “many patients and physicians remain skeptical,” Mukkamala said. “What’s needed now is real transparency, and the AMA is calling on insurers to publicly share clear, measurable proof of progress so patients and physicians can see whether these reforms are making a difference.”