Prior Authorization: The Bane of Doctors

Ahh, prior authorization. Those sweet, seductive words that insurance companies lull themselves to sleep at night with dollar signs jumping over a fence in a pasture.

“Prior authorization” means that a doctor can’t prescribe a particular medication (or type of medication) without — you guessed it! — prior authorization from the insurance company. This usually means paperwork, phone calls, and hassle. More hassle than most docs want to bother with unless they really believe the medication is necessary for the continued health and well being of their patient. Insurance companies know this, of course, and so place some of the most expensive medications on the list that requires “prior authorization” to keep their costs low.

Well, that’s the theory anyway. But does it actually work in real life?

That’s the question a bunch of researchers from Harvard University, Eli Lilly and the Centers for Disease Control and Prevention decided to get the answer to, in a new study published Tuesday in the journal Health Affairs.

They compared 4,600 patients prescribed various medications to treat schizophrenia or a related disorder enrolled in the Medicaid program in Maine and New Hampshire. New Hampshire has no prior authorization requirements for medications, while Maine instituted such a program for certain atypical antipsychotics (which lasted for only 8 months before it was discontinued). Their only outcome measure was discontinuation of a given medication for more than 30 days. They didn’t measure the actual effectiveness of the medication (e.g., whether medication X actually resulted in decreased symptoms or increased psychosocial functioning for the patient), nor things like increased hospitalizations due to a medication change or discontinuation.

Nor did they measure, which they note in the study’s limitations, whether the prescription of atypical antipsychotics resulted in an increase in other health concerns (such as diabetes, as other studies have shown). Such an increase would create additional unmeasured costs, for the patient’s care and treatment of this new health concern, and could completely reverse the study’s findings. But left unmeasured, we don’t yet know whether this was an actual issue for patients in this study who were prescribed more atypical antipsychotics.

Medication discontinuation, as the authors note, is an important measure. But presented in a vacuum (as health policy journals sometimes do), one cannot really put these findings into any sort of proper context. So prior authorization results in the intended effect — a decrease in the expensive medications — but also unintended effects — increase discontinuation of the less effective medications and virtually no greater cost savings.

The upshot from this study? Prior authorizations, at least for atypical antipsychotics prescribed to people with schizophrenia, don’t really help cut costs, and could actually hurt people with this disorder (because of increased discontinuation of the ineffective medications). Further research is required to see whether these results — decreasing the use of prior authorization, especially for certain psychiatric medications — actually mean better patient outcomes or not, which this research did not measure.

Reference:

Soumerai et al. (2008). Use Of Atypical Antipsychotic Drugs For Schizophrenia In Maine Medicaid Following A Policy Change. Health Affairs, 10.1377/hlthaff.27.3.w185.