Payers’ use of prior authorization (PA) is often discussed but seldom fully understood. Myths and misconceptions related to PAs abound and obfuscate issues. It’s time to do a little fact checking.
Myth #1. PA criteria are subjective
Wrong. PA criteria are quite objective and typically reflect the safe and effective use of the drug, based on the drug’s label and evidence-based guidelines. When comparative effectiveness research is lacking or weak, or when performance among products is not deemed to be clinically significant, then payers may naturally prefer and require a step through the less-costly product.
Myth #2. Denials are unpredictable
Nope. PA criteria are transparent and accessible, making denials very predictable. It boils down to a determination that the right specialist is prescribing the right drug to the right patient in the right dose for the right duration given the patient’s diagnosis and history. Prescribers know, or should know, when their PA requests conflict with PA criteria. When prescribers know a request will likely result in a denial, they can proactively request an exception to the formulary. Approvals of exceptions hinge on the prescriber’s ability to make a strong case for medical necessity, and often require support from peer-reviewed journal articles.
Myth #3. PAs are time-consuming
What? PA forms are clear and concise, and submission processes are typically speedy. To be fair, assembling the relevant clinical documentation may, however, take additional time for more complicated cases. Many prescribers blur the time it takes to request a PA with the time it takes for the payer to communicate a decision. Prescribers may have to wait up to 72 hours for a decision, although some decisions are handled immediately. Expedited decisions can be requested for reasons of medical necessity, such as when a delay in treatment could cause harm. Specialists will have considerable experience requesting and obtaining authorization for drugs they routinely prescribe, reducing the time and resources they must spend on the process. Many complaints about time also fail to make a distinction between PAs and appeals. No doubt, appeals can be arduous and take much longer.
Myth #4. PAs are meant to frustrate prescribers
It depends. PAs are meant to discourage overuse, misuse, off-label use, and non-covered use, such as cosmetic use. Payers need to maintain good relations with providers to sustain a high-quality network, so an assumption that payers use PAs simply to frustrate providers is a fallacy. Of course, PAs can shift prescribing behavior when you consider that providers often seek the path of least resistance. That said, when providers are passionate about getting a particular patient on a particular drug, dosage, or duration that conflicts with the formulary, they will jump through hoops, request a prior authorization or exception and, if need be, appeal a denial. Perhaps the vast majority of denials that are not appealed should have been denied.
Myth #5. PAs are all about saving money and maximizing profits
[Sound effect: Wrong answer buzzer] From a purely economic perspective, it makes sense to use PAs (and other administrative processes) when the benefits of doing so exceed the costs. Each PA costs payers approximately $40, so the average savings from managing utilization through PAs must exceed $40. That’s why payers typically consider PAs only for high-cost therapies. PAs can be used to implement step therapy requirements, and because PAs are driven by cost when there are no clinically significant considerations, the preferred products are typically lower-cost alternatives. In addition, PAs can trigger case- or disease management for high-cost conditions, especially among patients with a high risk of hospitalization. Beyond financial motivations, PAs are also used to flag contraindications and other risks of using the drug. Many providers cry foul over the burden PAs place on their practice, but just how many lives have been saved and injuries prevented by PAs is hard to say. Perhaps payers could help by documenting the health and financial outcomes that support the value of PAs.
Myth #6. PAs are driven by payers
Ah, if only the world were so simple. Payers have a fiduciary responsibility to manage pharmacy budgets on behalf of purchasers, namely employers and government programs. Purchasers demand cost controls and formularies that help to bend the rising cost curve. Their costs reflect the benefit designs they select — including the restrictiveness of the pharmacy benefit. To view PAs as profit-maximizing hassles selfishly imposed by MCOs and PBMs is overly simplistic. Providers and consumers who throw tomatoes at PAs on an open formulary should consider the alternative — a closed formulary that aggressively blocks the use of certain products. Like the saying goes, “Be careful what you wish for.”
Myth #7. PAs are implemented by unqualified staff
Ugh. Many prescribers criticize payers for allowing nurses or administrators to evaluate PA requests and communicate decisions. Let’s be clear, the nurse or administrator faithfully implementing the PA process is not exercising subjective judgment. The well-established criteria (see Myth #1) are established by P&T committees consisting of pharmacists and, yes, physicians, who leverage evidence — typically results published in peer-reviewed journals and/or clinical guidelines developed by experts when making their decisions. Each criterion can typically be reduced to a simple yes-or-no response — a simple, reliable logic that nurses and trained administrators can enforce but, importantly, do not design.
Bottom line
PAs are here to stay. They will become more common and the criteria more nuanced with the launches of new high-cost therapies and biosimilars, along with the generation of comparative effectiveness research, the development of guidelines, and the emergence of biomarkers. Frustration with PAs is misplaced and, instead, should be directed at the market’s failure to produce products that demonstrate evidence of clinically significant superiority — the root of many decisions to implement PAs. Whether we like to acknowledge this or not, equity and efficiency in healthcare requires some form of rationing, like PAs — and, so, our conversations about them should be rational.
No Comments