Prior Authorization: Friend or Foe?

By: Ranier Simons, ADAP Blog Guest Contributor

It is no secret that the United States has the highest healthcare expenditures in the world but does not have the healthcare outcomes to reflect the spending. Rampant healthcare expenditures financially burden individuals, health care systems, governments, and private industry. Discourse surrounding healthcare spending reform juggles questions of the pricing of pharmaceuticals and durable medical equipment, the fees paid for medical services and facilities, administrative fees, and even decisions of medical intervention based on perceived necessity. The Institute for Healthcare Improvement created a framework called the Tripe Aim: improve the health of the population, enhance the experience and outcomes of the patient, and reduce per person cost of care.[1] Unfortunately, many standard healthcare cost-benefit analyses do not benefit patients. They benefit profit. One such practice is Prior Authorization, also known as PA.

Photo Source: ViAANTE

PA is part of what insurance companies and other medical payers refer to as utilization management. Simply put, when a medical professional orders a procedure, modality, or medication, it is not automatically paid for by a patient’s insurance. Depending on the structure of the health plan, approval is required before an action is taken to guarantee it is covered by the insurance. If prior authorization is not obtained the patient and/or healthcare practice could face being required to pay full price out of pocket or healthcare providers not receiving reimbursement. Additionally, if a prior authorization is denied, that means the health plan will not pay and the patient is still faced with the question of paying full fees or forgoing prescribed treatment. 

In theory, Prior Authorization is supposed to lower health care expenditures by preventing waste. Waste in this case is defined as high utilization of expensive procedures, appliances, or medications in lieu of lower cost alternatives. Unfortunately, the current way PA operates can harm the patient, in favor of profit. 

A medical provider and patient together work on a treatment plan and decide on medications. The provider makes prescriptions based on what they feel is best for the health outcomes of the patient. When health plans deny Prior Authorizations, they often suggest alternative solutions based on cost that may not be as effective or effective at all. These plans use panels of professionals that include physicians and nurses to review and authorize/deny providers requests. Faced with a denial, a provider has to fight get the desired treatment approved.[2] Documentation has to be submitted providing rationale for desired treatment and why alternative treatment will not be as effective. Sometimes providers have to petition to show treatment is even necessary when PA denial is denial of any medical treatment at all.

Photo Source: MedPage Today

Prior authorization sometimes results in delays in care that can result in adverse health outcomes, hospitalizations, permanent bodily damage, or even death.[2] To address this issues New York state has something called prescriber prevails, which is prior authorization process that applies to Medicaid plans. Under prescriber prevails, for a select group of drugs, the process is an expedited three business days from request process where providers have the final say in approval instead of a third-party panel provided by a health plan.[3] The drug classes covered by prescriber prevails includes anti-depressants, anti-psychotics, anti-rejections, seizure and epilepsy, endocrine, hematologic, and immunologic.[4] This means that doctors have the final say for things like anti-viral medications for HIV. Unfortunately, it does not cover antiviral drugs for hepatitis C.[4]

Lowering health care expenditures should lower the financial burden of healthcare primarily for patients and medical providers. When lowering the costs of health plans results in poor patient outcomes, expenditures actually increase with resulting patient hospitalizations, treatment abandonment, and resulting later stage acute treatment utilization. Groups pushing for healthcare reform advocate for prescriber prevails policy to be expanded to other drug classes covered by Medicaid nationally, as well as forms of prescriber prevails for non-Medicaid health plans. Efforts to reform healthcare need to be patient-focused not profit-focused.

[1] Institute for Healthcare Improvement. (2022). Triple aim for populations. Retrieved from https://www.ihi.org/Topics/TripleAim/Pages/default.aspx
[2] Laws, J. (2022, Apr 4). Provider survey: Prior authorizations harm patients. Retrieved from https://www.hiv-hcv-watch.com/blog/4-4-2022
[3] Health Plan Association. (2019, Mar 4). Memorandum in opposition. Retrieved from https://nyhpa.org/2019/03/s-1794-a-a-2799-a-medicaid-prescriber-prevails/
[4] Hep Free NYC. (2016, Mar 16). Policy Brief: Prescriber prevails & Hep C in NYS. Retrieved from https://hepfree.nyc/policy-fact-sheet-prescriber-prevails-hep-c/

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.