Prior auth, step therapy, and consolidation pressure: Independent urology's challenge

Independent urology practices are navigating a convergence of pressures—stagnant Medicare reimbursement, rising operating costs, administrative burden, and competitive consolidation—that together threaten the long-term viability of community-based urologic care, according to Celeste Kirschner, CAE, MHSA, CEO of LUGPA.

At the core of the financial challenge is a straightforward arithmetic problem.

"Rising costs and less payment is not going to come out to a fantastic thing for anybody," Kirschner said. Salaries for key employees have continued to climb, supply chain pressures have driven up supply costs, and Medicare payment has not kept pace with any of it. That gap between revenue and operating costs makes it increasingly difficult for independent practices to invest in new technologies and services—creating a compounding disadvantage relative to hospital-employed and corporate-affiliated competitors.

Administrative burden amplifies the cost pressure. Prior authorization and regulatory compliance require dedicated staff to manage paperwork, chase preauthorization approvals, and navigate insurer requirements—all of which add headcount and expense without generating clinical revenue.

"Prior authorization, regulatory requirements—all of those administrative burdens require more people in the office to handle them," Kirschner said. The result is that practices are spending more to deliver care while being paid the same or less for it.

For patients, prior authorization and step therapy requirements translate directly into delayed access to appropriate treatment. Kirschner described a scenario familiar to many urologists: a patient who has been stable on a long-term therapeutic agent changes employers, acquires new insurance, and is suddenly required to restart a medication that previously failed.

"The new insurer insists that the patient go back to some drug that they tried three times ago that didn't work then and is not going to work now," she said. "Reform should really focus on appropriate utilization without creating these artificial barriers for medically necessary care."

Site-neutral payment reform is among the policy levers with the most direct implications for independent practice viability. When the same procedure is reimbursed at a significantly higher rate in a hospital outpatient setting than in a physician office, it creates financial incentives for hospital acquisition—and forces some patients into higher-cost settings even when community-based care would be clinically equivalent.

"Patients are forced into higher-cost settings, which affects not only physician payment but what patients have to pay out of pocket," Kirschner said. Site-neutral reimbursement would reduce that distortion.

On the policy path forward, Kirschner was direct about where systemic change is needed.

"We shouldn't start creating policies that create incentives for consolidation—and so many of the previous policies that we have in place really created that incentive for consolidation, maybe not on purpose, but certainly as an effect," she said. Reducing administrative burden, stabilizing Medicare payment through permanent reform, and removing reimbursement structures that favor hospital-based care over community practice are the levers she identified as most likely to preserve independent urology's future.

"We want to make sure our physician practices are financially viable and can continue investing in patient care—because at some point, the numbers just don't work out."