What is Prior Authorization?
Prior authorization is a process in which health insurance companies require healthcare professionals to obtain approval before the plan will pay for pharmaceuticals and medical services. When prior authorization is required, a healthcare professional may have to submit information about the patient’s diagnosis, why the prescribed treatment is medically necessary, or what other treatments the patient has already tried. In some cases, approval of a prior authorization can involve multiple rounds of appeals and direct conversations between the prescribing healthcare professional and a medical reviewer from the health insurance company.
While prior authorization requirements can help health plans keep their costs low, when used inappropriately, these requirements interrupt care, divert resources from patients, and complicate medical decision-making.
Prior authorization requirements can lead to care delays, negative clinical outcomes, and increased hospitalizations. Many members of the rare disease community cannot physically or financially afford these consequences.
Why Is the Increased Use of Prior Authorization Concerning?
In many cases, prior authorization processes create challenges that rare disease patients must overcome to access treatments that many have fought for decades to exist.
- Navigating a rare disease diagnosis can require more than 6 years, on average, after symptoms begin. In many cases, once a patient is diagnosed, inefficient prior authorization processes can further delay their treatment
- Rare disease patients may have limited options for alternatives if a prior authorization is denied
- Health insurance companies are not likely to have the appropriate rare disease experts on staff to determine medical necessity
- Some patients may not realize they have a right to appeal prior authorization denials or they may not have the ability to navigate the lengthy appeals process
- Prior authorization approvals are time-limited and require frequent renewals even when a rare disease patient’s medical condition is not expected to change over time
How Can Policy Action Help?
Prior authorization policies vary from state to state and payer to payer due to differences in insurance regulations, healthcare systems, and population needs. While the federal government has authority over certain aspects of healthcare policy, states also have the power to regulate insurance practices and healthcare delivery within their boundaries.
The RARE Foundation supports collaborative efforts between state and federal entities to create comprehensive prior authorization reform. This includes efforts to reduce the volume of prior authorization requests, reduce administrative burdens for providers, and increase transparency and timeliness in the approval process.
Meaningful prior authorization reform for the rare disease community includes:
- Improving the Timeliness of Prior Authorization Review: Health plans should conduct timely reviews of prior authorization requests and appeals, as well as request additional information, if needed, in a reasonable amount of time.
- Reducing the Quantity of Prior Authorization Requests: Health plans should reduce unnecessary and repetitive prior authorization requirements and identify ways to reduce requirements for treatments prescribed by healthcare professionals when they have a high rate of approval.
- Improve the Quality of the Process: Health plans should ensure continuity of care by avoiding unnecessary denials, considering all relevant information before making adverse determinations, and ensuring that prior authorization determinations are made by qualified experts.
- Increase the Transparency of the Process: Health plans should notify patients of new prior authorization requirements, share metrics about their prior authorization approval and denial rates, and have clear information available about an individual’s appeals rights.
