Prior auths are here to stay

May 21, 2015

We asked healthcare experts and analysts how the move to value-based care will affect prior authorizations. Here's what they said.

Coughlin

While some longstanding traditions will be left in the dust with the rise of value-based care, one that won’t is the use of prior authorizations to control costs.

“We literally just asked a gathering of payers and providers if the use of evidence-based criteria, utilization management, and prior authorization are going to fade in the next three years or so, as a result of the move to value-based care and [accountable care organizations] and so on," Laura Coughlin, the vice president of clinical development with McKesson Health Solutions recently told Managed Healthcare Executive. "They were fairly unanimous in saying absolutely not. That’s because the desire to ensure that people are getting safe, effective, quality care is not going to go away."

Related:Electronic prior authorization eases burden

Craig Samitt, MD, global head of the healthcare provider practice at Oliver Wyman, agreed. He said prior authorization, clinical profiling, limited networks, and other administrative techniques remain an essential method for insurers and providers to deliver value, but their use is no longer just one-dimensional “mother may I approvals.”

“They have evolved to the point where insurers selectively use these tools to guide consumers to higher quality clinicians, evidence-based and clinically appropriate services, and lower cost but equally efficacious care options,” he said.

SamittCoughlin said technology also is driving the revival of pre-authorizations-both in its ability to speed up authorizations as well as its role in creating more information for physicians to learn. 

“Authorizations that used to take one, two, three, even 15 days to get a decision can now move forward immediately. This makes the patient happy, the provider happy, and supports quality outcomes at a lower cost,” she said.

In addition, “time marches on, technology advances, and even with CMEs and all the things physicians do to stay current in their area, they can’t keep up with healthcare’s velocity of change,” she said. “There has to be a way for people to ensure quality, safe, effective care for patients to get the best outcomes.”

Patrick Dunham, chief executive officer for Curant Health, said he “would guess prior authorizations are more common practice because of the increase in specialty medications in the market. Twenty years ago specialty drug spend accounted for about 10% of total drug spend. I believe it now accounts for approximately 70% of total drug spend.”

Related:Pharma pricing strategies: Prior authorizations, speciality pharmacies seen as solutions

According to Dunham, prior authorizations originally came onto the scene as a safety measure. The most powerful medications came with the most serious side effects and contraindications.

Dunham“Today,” he said, “the newest specialty medications, although relatively safe, are very expensive. PBMs and payers have added [prior authorizations] to confirm that proper step therapy or clinical requirements have been met before they agree to pay for the therapy. I would expect [prior authorizations] to become even more commonplace as we see even more specialty expensive drugs flood the market.”

“I think everyone understands that [prior authorizations] are here to stay and we will continue to see an increase in their use,” said Dunham.