A Bastion of Innovation

Combined Otolaryngology Spring Meetings (COSM) 2024

At this year's COSM in Chicago, I had the pleasure of engaging with many medical device executives and thought leaders in surgery to discuss the ethical use of AI to mitigate prior authorization denials. It is a timely topic as 86% of physicians now identify prior authorizations as a “high or extremely high” burden on the practice.

For those unfamiliar with COSM, it dates back to 1970 when the Triological Society proposed the formation of a liaison committee composed of the Secretaries of each of the Otolaryngology societies (5 at the time). Today, COSM comprises nine societies that convene each spring to discuss the latest advancements in the field of Otolaryngology. This year's meeting took place last week in the Windy City.

The Impact of Prior Auth Denials on Surgical Innovation

One of the notable panel discussions focused on "The Nasal Valve: Selecting Patients for Minimally Invasive vs. Open Procedures." While the scientific debate on techniques, both traditional and innovative, was significant, my conversations with medical device executives after the event soon shifted to the challenges of translating patient needs into covered treatments.

For instance, Aerin Medical offers a well-studied, minimally invasive treatment for nasal valve obstruction that is both safe and effective. I personally performed hundreds of these procedures until the reimbursement became untenable. Despite having a CPT code covered by traditional Medicare since January 1, 2023, the treatment still faces coverage challenges. With the growing majority of Medicare enrollees opting for Medicare Advantage plans (typically not covered) and minimal to no coverage by commercial insurers this company faces utilization challenges that hinder cash flows and create access issues for patients. It is a disservice to any patient that could benefit from their procedure.

This predicament is not unique to Aerin Medical but affects thousands of other innovative companies in the medical device space. These companies are hindered not by the efficacy of their treatments but by insurance executives making decisions based on unknown criteria and often not solely on cost. Many of these innovations are actually more cost-effective, safer, and offer quicker recovery than traditional techniques, yet they remain blocked at the executive level within the insurance companies themselves.

When Software Decides

The world changed when insurance companies started using software to make coverage decisions. One of the greatest tragedies in medicine is when a patient cannot receive the care recommended by their surgeon. Decisions about something as important as surgery should be based on expert evaluation and experience, but they have now become a quick denial by a software system and an insurance executive analyzing historical claims data.?

“We literally click and submit. It takes all of 10 seconds to do 50 at a time.” - former Cigna doctor

This issue is exacerbated when such denial practices become almost automatic for certain procedures. Across all surgical specialties we are in dire need of immediate action.

Breaking Down the Problem

Issues with Obtaining a Coverage Policy

• Objective Data: Each specialty requires clear data on patient eligibility and how many patients, meeting the necessity criteria, are denied coverage for innovative procedures. Currently this data is held by the insurance companies and not shared.
• Documentation: Enhancing notes and data acquisition is essential to expedite the process from Medicare approval to commercial insurance adoption and coverage.
• Transparency: The payor side lacks transparency, particularly regarding the specific outcomes they are looking for in coverage adoption decisions.

Issues with Inconsistent Application of Existing Coverage Policies

• Increasing Denials: Surgeons, patients, and medical device companies face a growing number of denials for procedures that should be covered based on existing coverage policies. Essentially, surgeons are increasingly stating, “The insurance company is denying a covered service inappropriately.”?
• Discrepancies in Criteria: Payors claim patients do not meet criteria for various reasons, while doctors assert that they do.
• Patient Impact: Patients are suffering delayed care or are not receiving the innovative treatments they need due to these denials. The current impact of these practices on patient lives needs hard data.
• Transparency: The lack of transparency surrounding denials of care for procedures with existing coverage policies is confounding, complicating the process for patients and providers alike.

The Hidden Bias in Insurance Authorizations

These issues underscore a significant problem in healthcare insurance: the lack of transparency in the authorization process and their underlying decision frameworks. Many providers believe that insurance companies have purposely hidden their methods for good reason. There is now sound data available showing how some insurance companies have employed novel technologies to shift the balance of denials in their own favor.?

Recent lawsuits against some of the nation's largest insurers reveal that systems like PxDx (Cigna) and nh Predict (UHC) have been used to exploit overburdened doctors, who submit suboptimal documentation, to be underscored by software running sophisticated AI algorithms. Based on data from these lawsuits some estimate this practice has been ongoing for over 5 years.

The Need for Transparency, Accountability, and Action

Surgeons and medical device companies must urgently adopt their own AI frameworks to address the challenges associated with prior authorization (PA) approvals across the industry.

The pervasive use of prior authorizations is hindering progress, causing delays for nearly 20% of patients and blocking access to innovative procedures and necessary treatments. Unfortunately, for some of the medical device companies I spoke to at COSM, this problem is negatively impacting their financial projections, their valuations for public offerings, or their ability to seek further rounds of funding. It is indicative of a greater problem where Insurance companies are now creating serious issues for innovation in the surgical space as a whole.

The Role of AI-Driven SaaS in Surgical Care

Stakeholder solutions in the surgical marketplace will not come from the major EHR vendors like Epic and Cerner. EHRs are not designed to improve prior authorization approval rates; they are interactive databases meant to document care. Even large CRMs like Salesforce lack the granular knowledge to bring transformative AI solutions to the surgical space in this regard.?

The next wave of transformation will come from vertical SaaS solutions executing on proven AI frameworks. The benefits of custom AI solutions for surgery are many:

• Improved Scheduling: A better schedule for surgeons, filled with more surgical patients and less medical management.
• Reduced Burnout: Less burnout for surgical teams as the PA process becomes more efficient and less burdensome.
• Protecting Innovation: Meeting sales goals within the medical device industry, particularly for innovative companies and sales teams ensures the future of surgical innovation moving forward.

The Time is Now

It is time for surgeons and the systems they work in to transition from common digital processes to innovative AI driven frameworks, as the major players controlling care did so years ago.?

There is a path out of these problems for both innovative surgeons and medical device companies alike. If you are a surgeon, executive, or thought leader, please join me in exploring patient-centric solutions that re-establish access to innovative surgical care.

Fire up!