Largest Mass. health insurer moves to reduce red tape clogging hospitals

The state’s largest health insurer, Blue Cross Blue Shield of Massachusetts, plans to stop requiring hospitals to get its approval for certain services, in an effort to speed up the discharge process for patients stuck in hospitals.

The move is meant to ease backlogs in a busy and crowded health care system. Hospital leaders have long raised concerns that hundreds of patients languish in hospitals each month, waiting to go home or to rehabilitation or nursing facilities — but their departures often are delayed by insurance hurdles.

This week, Blue Cross executives said they’ve heard those concerns, and they will stop requiring hospitals to seek advance approval before sending patients home to continue treatment.

The change will take effect in January for Blue Cross members who get their insurance through their employers, eliminating 14,000 such approvals each year, said Dr. Sandhya Rao, chief medical officer at Blue Cross. For people on Medicare Advantage plans, the policy changes take effect in 2025.

"We're taking this step in response to the capacity crisis that our local hospitals are facing," Rao said in an interview Monday. "We really wanted to help simplify the process for doctors, for hospital staff, for patients and their families."

Currently, it can take days for Blue Cross to approve a request through the process known as prior authorization.

With hospital beds in high demand, Rao said, the company understands "really every minute makes a difference."

The change should allow patients to leave hospitals sooner and receive services at home, including physical therapy, occupational therapy, nurse visits and social worker visits.

This, in turn, would free up space for other sick patients waiting for hospital beds.

Michael Sroczynski, senior vice president at the Massachusetts Health & Hospital Association, an industry group, said hospital leaders commend Blue Cross’s policy change.

"This is exactly the type of administrative simplification that can improve patients’ access to care, ease caregiver burnout, and reduce wasteful costs," he said in a statement. "It is a promising step, and we hope it will set an example for other plans to follow."

The hospital association released a report Monday that said administrative burdens are costing hospitals and doctors an estimated $1.75 billion a year, and those costs could be saved by reducing red tape — such as insurance prior authorizations.

Insurers argue the prior authorization process allows them to keep checks on spending by making sure patients get tests and treatments they actually need. Blue Cross requires prior authorization for 2% of insurance claims, Rao said.

The insurer, which has 3 million members, recently waived authorization requirements for glucose monitoring devices for people with Type 1 diabetes, as well as for outpatient mental health treatment.

The state's second-biggest insurer, Point32Health, which operates Tufts and Harvard Pilgrim health plans, is also considering changes to prior authorization policies.

"We are in the process of evaluating the potential elimination of prior authorizations for certain home care services, including when our members are transitioning from a hospital setting," spokesperson Kathleen Makela said in an email.

While prior authorizations can help control medical costs, she said, "we do not want them to be an impediment."