Effective Prior Authorization Management

August 2023
The effective management of the Prior Authorization (PA) function is a crucial aspect of healthcare that ensures patients receive the appropriate medications while controlling costs. Pharmacy Benefit Managers (PBMs) play a vital role in this process. Inappropriate managing of the PA process can negatively impact patient outcomes, and result in much higher pharmacy and/or medical costs.

The most important function of the PA process is to ensure the safety and appropriateness of prescribed medications, guarding against adverse drug interactions and potential harm. PBM’s must carefully assess the medical necessity and appropriateness of the prescribed therapies.

A secondary purpose of the PA process is to evaluate the clinical and cost effectiveness of the prescribed therapy. By identifying and requiring the use of lower cost, first line therapies whenever it is clinically appropriate, PBMs can save expenses for their clients.

PBMs serve as intermediaries between healthcare providers, patients, and payers. Through efficient PA management, they foster collaboration and coordination among these stakeholders. PBMs facilitate communication, provide necessary information, and ensure better alignment between healthcare providers and payers. This collaborative approach results in a more streamlined and patient-centered healthcare system.

Ineffective PA management can result in unwanted outcomes and excessive cost. Rebates create a perverse incentive for PBMs which encourage the approval of medications that may not be the best course of treatment for the patient. PBMs report overall PA approval rates that range from 40-90%. Such a wide range indicates that different PBMs exercise different strategies for managing their PA processes.

When a PBM authorizes a high-cost drug, and the member becomes stabilized on that drug, there is very little chance of convincing either the member or their doctor to try a lower cost therapy in its place. Therefore, ineffective PA protocols result in higher plan costs not just for the current period, but for years to come.

CCRx closely monitors PA protocols and helps our clients identify the PBMs that we believe do the most effective job of managing the Prior Authorization process. Doing so not only ensures better outcomes for patients, but it saves money for the payers, as well. We continually monitor these programs and work with the PBMs to understand any decisions that seem unusual. This is not a process that can be ignored- it requires ongoing attention of clinical experts.

CCRx is a pharmacy consulting firm dedicated to achieving the best possible outcomes for patients at the lowest possible cost. We are aligned with the interests of our clients, and never take payments from PBMs for placing business with them.

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