Insurers designate certain prescription drugs with prior authorization to ensure safe and medically … More
getty
Major health insurers say they’re changing the way prior authorization works to make it more patient friendly. This appears to be in response to longstanding criticism from patient and healthcare provider groups that the process of getting pre-approval from health plans for reimbursement of healthcare services and technologies is too onerous. Insurance companies may also be promising fixes to preempt government action that would attempt to curb the use of prior authorization.
Representatives from several major health insurers said last week they had pledged to the Department of Health and Human Services they would improve their prior authorization protocols for diagnostic and screening tests, prescription medications and hospital or clinic procedures. The insurers vowed to reduce the number of claims subject to prior authorization, standardize electronic requests for exemptions and appeals and resolve 90% of requests in real time by 2027. They also hope that artificial intelligence will facilitate a more efficient prior authorization process.
In the case of medicines, prior authorization is typically required for brand-name drugs that have a generic available, as well as high-cost therapeutics, whether branded or generic. Here, prior authorization implies that a healthcare provider or patient must obtain pre-approval from a health insurer before prescribing a medication or having it dispensed at the pharmacy. From the perspective of health plans, this process ensures that only treatments deemed “medically necessary” will be covered.
Health insurers issue millions of denials based on prior authorization every year. Patients can request medical exemptions or appeal plan decisions, but the process can be complicated and cumbersome. NBC News reports that some patients are “stuck in prior authorization” purgatory, as they “run out of time or treatment options.” An Office of Inspector General memorandum recently pointed to instances in which Medicare Advantage plans incorrectly denied beneficiaries’ access to services even though they met Medicare coverage rules.
Decades ago, when prior authorization was first introduced, it was mostly deployed to ensure medicines were being administered to or taken by the right patient for an appropriate indication. To some extent, this holds true today, too. Prescription medications tagged with prior authorization can have potential safety concerns, including things like drug-drug interactions which prescribers and patients need to be aware of. Additionally, certain drugs should only be prescribed to patients who’ve been identified through biomarker testing as being likely to respond positively or unlikely to suffer from an adverse reaction. In these instances, prior authorization is essential.
Ideally, prior authorization can be used to optimize the use of healthcare services and technologies. If used judiciously, such policies are intended to be checks on overutilization. In this context, insurers can nudge physicians towards prescribing less costly alternatives that are therapeutically equivalent. But this presumes the treatment options health plans favor work as well or better than the intervention placed under prior authorization protocol. Moreover, imposing such a prerequisite can increase the administrative burden on both doctors and patients, delay care or result in no treatment at all, which may in turn lead to worse health outcomes and greater costs in the long run.
What’s more, even in the short term, plans may not actually save that much by instituting prior authorization as it doesn’t ultimately prevent that many patients from accessing products. To illustrate, upon appeal, of 35 million prior authorization requests to Medicare Advantage plans in 2021, 82% were overturned.
In light of the problems cited above, health insurers are pledging fixes to the ways in which prior authorization is implemented. This isn’t the first time the industry has promised to streamline the process. Insurers made a similar promise during the first Trump Administration in 2018. When Centers for Medicare and Medicaid Services Administrator Mehmet Oz was asked recently why he thought this effort by the industry could work when others have failed, he responded by saying that the technology is better now and the administration plans to back the efforts with regulation. “Either you fix it, or we’ll fix it,” Oz told insurance company executives.
But the executive branch doesn’t have many levers at its disposal without Congress’s support. Perhaps Oz is referencing the bills that have been introduced by Democrats and Republicans alike which specifically target Medicare Advantage plans. The proposals focus on standardizing their prior authorization protocols and increasing transparency of and reporting on decision-making by plans. This includes requiring insurers to provide detailed clinical reasoning to justify use of the management tool. Additionally, the introduced legislation looks to mandate clear timelines for the processing of medical exemptions and appeals. But it’s unknown whether the bills will ever make it to passage and enactment.
