What is Prior Authorization and Why is it so Important? 

What is Prior Authorization and Why is it so Important? 

Prior authorizations (PA) have become more than just an annoyance to medical practitioners. Are you looking to know what is prior authorization? It has become a source of trouble and left many complaining about it. Despite its original honorable intentions, PA’s have become notorious for creating detrimental consequences for patients and the industry’s capacity to provide care. As per AMA’s 2021 physician study on Prior Authorization, 40 percent of practices are forced to retain employees who deal exclusively with Prior Authorization. And it does not help that the list of prior authorized drugs and treatments keeps getting longer. Serious repercussions of PA’s include delays in care and negative patient outcomes. But are we justified in our discontentment?

This has led to significant frustrations for many providers and patients. So why does prior authorization exist and what is its initial intent? 

Prior auth is a process in which a health care provider must receive approval from an insurance carrier before the patient receives coverage and care – whether for a test, procedure or medication. 

The main intent of prior authorization is to ensure the necessity of the drug therapy, test, or procedure, establish the clinical appropriateness of the drug or treatment and check if it aligns with evidence-based guidelines. 

Benefits of Prior Authorization 

Despite the many frustrations that prior authorizations cause, they offer many prior authorization benefits as shared by the advocacy group AHIP. Below are few benefits of prior auth to consider and know more about what is prior authorization benefits?

1. Lower overall health-care costs 

Over the years, the healthcare industry has conducted numerous studies to understand how prior authorization benefits impact the cost of care. Findings have unanimously revealed that PA can protect both members and payers from overspending on costly medicines and treatments when equally effective and less expensive alternatives are available. For example, a prescription may be written for a costly brand name drug that has an equal generic version available that can cost up to 30 per cent less than the brand name drug. This is one of the best

2. PA protects members from ineffective treatments  

Health plans are privy to a monumental amount of data. Such knowledge can be applied extensively to improve patient outcomes. For instance, when compared to a small practice, an insurer is in a better position to comment upon the efficacy of a drug among the patient’s demographic due to the large amount of data they possess. This will enable the administration of accurate drugs for effective treatments.

3. PA offers protection from questionable treatments 

The extensive amount of data available to an insurer can indicate the risks of a particular drug for a specific demographic. It can also alert physicians to the potential dangers of certain drug combinations, which can sometimes be overlooked by a provider. Likewise, due to the extensive amount of data available, PA plays a crucial role in helping avoid drugs that could be addictive. The application of such information through PA benefits patients directly. Considering the benefits to patients, the need for prior authorization is undeniable.

4. Advocating safe drug use 

The epidemic of drug abuse in the US is of major concern to the health care industry. Prescription drug abuse places a serious health and economic burden on the US healthcare system, leading to many preventable deaths. However, prior authorization can enable timely intervention by preventing certain dangerous and addictive drugs from being dispensed.  

Contrary to popular belief, the goal of prior authorization is not to restrict access or increase burdens, but to promote the safe and relevant use of medicines and treatments. It is a process that is implement for the larger good of all involved. Learn more about prior authorization and how to build better processes to avoid delays for patients, here.

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