This is especially difficult for the young, as well as indigent patients covered by Medicaid. Different rules and standards are set for each state without any consistency.
The attention focused on setting a formulary by an intermediary known as the pharmacy benefit manager (PBM) has been increasing. PBMs manage prescription drug benefits on behalf of health insurers. They help negotiate discounts or rebates on specific drugs from manufacturers, which then lead to that drug’s inclusion on an insurer’s formulary.
Many people believe this middleman forces higher list prices for medications. And a recent study found the share of rebates PBMs pass through to insurers and payers increased from 78% in 2012 to 91% in 2016.3 But many small insurers and employers say they don’t receive this share of savings. There is great interest in tracking this money trail. If the formulary changes from year to year, it may very well be due to rebates or discounts. That information is never available to the physician or patient.
Patient safety: As for patient safety, the same 2019 AMA survey asked physicians if they had experience(s) in which the prior authorization process affected care delivery and led to a serious adverse event, defined as death, hospitalization, disability/permanent bodily damage or other life-threatening event. Twenty-four percent of physicians reported this experience and 16% of physicians additionally reported that delay led to hospitalization. Ninety-one percent reported some sort of a care delay due to prior authorizations, and 74% reported that some patients abandoned the recommended course of treatment due to their prior authorization experience.
Delay of care and treatment abandonment certainly play a role in ensuring poorer outcomes for patients.
Call for Reform
Insurers may have instituted the prior authorization process with the intention of decreasing healthcare costs and improving patient safety and outcomes. However, it has become abundantly clear that the current, convoluted process does nothing but cause frustration, while passing the costs to physicians and patients. What can we do as physicians to push for change?
We can lend our voices to a call for a federal legislative solution, such as reform bill H.R. 3107: The Improving Seniors’ Timely Access to Care Act. This bill would require standardization of the prior authorization process via an electronic format, which can ease transmission to insurance companies and potentially provide real-time decisions in response. The bill would also require transparency, requiring payers to publish specified prior authorization information annually, including the percentage of requests approved and the average response time.
