When a less expensive drug is available and comparable to a more expensive one, corporations and government purchasers have developed policies that force the patient to try the cheaper drug first by requiring prior authorization (PA) to skip to a more expensive alternative. This has pulled cost out of the system, but also has delayed appropriate treatment for patients and wrapped providers in red tape.
In Oklahoma, Sen. Jessica Garvin has introduced SB 756, which would streamline this process by allowing some providers in the state Medicaid program to skip the prior authorization process. This “gold card” status would provide an exception to the PA process to providers who “would have been approved for not less than 90% of the prior authorization requests by the provider for the particular healthcare service.”
The insurance you have may determine which drug you are prescribed because your insurer may require prior authorization (PA) for certain treatments. PA reform is taking shape in several states to allow patients faster access to treatments held up by bureaucratic gatekeepers. Insurance companies and payers stress the need for PA as a means of providing the right care at the right price, noting that one person’s “bureaucratic hurdle” is the “standard of care” to another. When it comes to public programs, the hurdles are higher, and the payments are lower.
Because Medicaid patients are sicker, and more medically complex, they more easily fell victim to COVID-19’s ability to hospitalize and kill the infected. During the pandemic, Medicaid enrollment expanded under national emergency declarations. This change reduced the number of uninsured, but also shifted the overall mix of government versus private insurance coverage toward underpaying public programs. During the past three years, no state has seen more Medicaid expansion than Oklahoma, whose enrollment nearly doubled.
Current Medicaid reimbursement is 72 cents on-the-dollar when compared to private health payers. Sen. Garvin’s bill would make it less burdensome for providers to see Medicaid patients. Physicians and other providers who already face a daunting thicket of regulations and reduced payments can be easily dissuaded from seeing Medicaid patients entirely if those reduced payments are rejected entirely because the gatekeepers were unsatisfied. Consequently, exemptions to PA are welcomed by doctors forced to repeatedly beg permission for the appropriate medication.
States should reduce regulatory burdens on all sick patients and their doctors. PA reform must balance the needs of the patient with the need to reduce cost. Reforms should include transparency regarding PA requirements from insurance companies and streamlining of the process to speed approvals and cut red tape.
Gold Card legislation first passed in Texas (HB3459) in 2021, with similar requirements. The Texas Medical Association reported, “on average 31 prior authorization requests a week, taking time away from patient care. Four-fifths (85%) reported prior authorizations delayed patient care, and 78% said this can lead patients to abandon needed treatment altogether.”
A 2022 American Medical Association survey shows PA reform is needed to address patient safety concerns. In fact, 94 percent of physicians report care delays due to PA. Moreover, 33 percent say that PA has led to a serious adverse event for a patient. Sadly, 25 percent report a hospitalization due to PA and 9 percent confirm that PA led to a patients’ disability, permanent bodily damage, congenital anomaly, birth defect, or death.
The Biden/Harris administration is seeking to streamline PA through mandates on payers. The Centers for Medicare and Medicaid Services’ proposed reforms to implement include an electronic prior authorization process, shorter timeframes for certain payers to respond to PA requests, and information more readily available through enhanced transparency requirements. The policy focuses on public plans and oversight.
States should recognize that although helpful, more is needed to improve care. Legislatures should adopt common sense PA reforms to improve patient safety and redirect valuable physician time away from insurance companies and back to the patient.
The following resources provide additional information about prior authorization reform efforts:
Bills in 30 states show momentum to fix prior authorization https://www.ama-assn.org/practice-management/prior-authorization/bills-30-states-show-momentum-fix-prior-authorization The American Medical Association reviews Prior Authorization Legislation in the States
CMS Prior authorization proposal aims to streamline the process and improve transparency
The Kaiser Foundation examines the proposed federal action to improve patient care through PA reform.
Could Texas Law on Limiting Prior Authorization Delays Move the Needle Nationwide? https://www.medpagetoday.com/special-reports/exclusives/94625 Jennifer Henderson from MedPage looks at how the “gold card” is the first step in helping physicians with the burdensome process of prior authorization.
Measuring the Scope of Prior Authorization Policies https://jamanetwork.com/journals/jama-health-forum/fullarticle/2780396 JAMA details procedures that require prior authorization and how that impacts delivery
Will Prescriber “Gold Cards” Solve the Prior Authorization Problem?
The Accreditation Council for Medical Affairs reviews “Gold Card” statutes as a means of reforming PA
Why Prior Authorization is Bad for Patients and Business https://www.ama-assn.org/practice-management/prior-authorization/why-prior-authorization-bad-patients-and-bad-business Andis Robeznieks from the American Medical Association outlines what’s wrong with prior authorization
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.
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