September 08, 2023

Prior Authorization: Benefits, Burdens, and Bold Ideas for Improvement

Prior authorizations have been a mainstay of utilization management strategies. Understanding the challenges they present for different stakeholders across the industry can lead to improved efficiency while helping employers remain steadfast to cost, quality, and member experience goals.

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In recent years, PAs have become a target for provider groups due to the excessive administrative burden they cause. Employers do not always have clear visibility to what services and medications require a PA, and an absence of reporting on the volume and outcomes of the process from their partners makes it challenging for many employers to assess the effectiveness of PAs and their role in achieving desired health outcomes as well as cost savings. Employers can work with their health plans and pharmacy benefit managers (PBMs) to make decisions on what services have a PA requirement and regularly monitor and evaluate whether this tool is doing what it is intended to do.

Some strategies to improve efficiency in the PA process, such as gold carding and automation, have gained traction, but these strategies must be implemented in combination with an evaluation of medically necessary, appropriate and safe health care services personalized to each patient. An ideal PA process would be able to help physicians and plans drive patients to the most cost-effective and clinically appropriate treatment without putting a disproportionate administrative or patient burden on providers, which could lead to delays in appropriate treatment and possibly adverse outcomes.

Stakeholder Perspectives

See Table 1 below outlining some of the benefits and challenges different stakeholders face regarding the PA process.

Table 1: Benefits and Challenges of the PA Process

Emerging Solutions and Relevant Changes within Prior Authorization

• Vendor Carve-outs: Employers may explore carving out the PA process to achieve more transparency on PA decisions and to apply a higher level of scrutiny for protocol administration and outcomes.
• Gold Carding: Physician practices that consistently remain in line with evidence-based guidelines for treating their patients are rewarded with an exemption from PA requirements for certain services. This may only reward physicians who consistently achieve approval due to their mastery of navigating the current PA process, but multiple states are experimenting with the idea.
• Automation: An end-to-end automation approach may be able to reduce administrative burden and optimize the PA process through a streamlined workflow for patients, providers and health plans and PBMs.

Key Recommendations

• 1 | Collaborate with your health plan and PBM to achieve PA goal alignment and further transparency of the benefits, limitations and overall impacts of the PA process. This can be achieved by asking for regular reporting on the monitoring of PAs and the evaluation of their effectiveness.
• 2 | Promote discussions among health plans/PBMs and providers within your network about the clinical evidence behind certain common treatments and medications to see where PAs may not be necessary and where more stringent PA processes may be required. Motivate partners to use the PA process as a tool to inform providers on evolving evidence-based treatment protocols, not as a barrier to treating patients. Such discussions can help identify where PAs are successfully achieving their quality and cost goals while determining their incremental value to services that have become standards of practice.
• 3 | Galvanize the health plans in your network to work with providers to improve efficiency and consistency of the PA process, reduce the need for manual intervention and align on recommendations about how the process can be designed to help providers comply while seeking the most effective, covered treatment.

More Topics

Resource Plan Design & Administration Cost Management Pharmacy