What is a Prior Authorization?
Prior authorization for prescription drugs is required when the insurance company asks the patient’s physician to get specific medications approved. Prior authorization must be provided before the insurance company will provide full (or any) coverage for those medications.
Health insurance companies pre-authorize medications in order to keep healthcare costs low. By ensuring that medication is medically necessary, up-to-date, as economical as possible, and isn’t being duplicated, health insurance companies can afford to provide more expensive medications to those who truly need it.
Why Prior Authorization is Required?
In many cases, prior authorizations are intended to ensure drug use is appropriate and the most cost-effective therapy is being used. For most of the insurance providers, there are three reasons for the use of prior authorization: scope controls, utilization controls, and product-based controls.
Scope and Utilization-based Prior Authorization:
Scope controls refer to constraints used to insure a drug is used for approved indications and is therapeutically appropriate. Utilization controls are used to limit the quantity of medication dispensed or to limit the duration of use.
Product Based Prior Authorization (PBPA):
This program divides certain therapeutic categories of drugs into two or more levels called Tiers. Tier 1 medications are preferred as the first step for treating a member’s health condition. They are cost-effective and are usually available without Prior Authorization. Members that do not achieve a clinical success with Tier 1 medications may qualify to obtain a Tier 2 or Tier 3 medication. Most of these categories are set up so that if a member meets the step therapy criteria, their claim for the next highest tier will process without a Prior Authorization. Doctors who have members with clinical exceptions may request a Prior Authorization to skip the step therapy process and receive the Tier 2 or Tier 3 drug immediately.
What Kinds of Medications Warrant Prior Authorization?
Insurance companies will most likely require prior authorizations for the following drugs:
- Brand-name drugs that have a generic available.
- Drugs that are intended for certain age groups or conditions only.
- Drugs used only for cosmetic reasons.
- Drugs that are neither preventative nor used to treat non-life-threatening conditions.
- Drugs (including those dosed at higher than standard doses) that may have adverse health effects, possibly dangerous interactions, and/or risks for abuse or misuse.
- Drugs that are not covered by your insurance, but deemed medically necessary by the doctor.
How Does Prior Authorization Work?
Step 1:
The pharmacy will contact if prescribing doctor if he or she did not obtain prior authorization from the insurance company when prescribing a medication.
Step 2:
The physician will contact the insurance company and submit a formal authorization request.
Step 3:
The patient’s insurance provider may have you fill out and sign some forms.
Step 4:
The insurance company will alert the pharmacy once they have approved or denied the request.
A prior authorization only lasts for a set period of time, and you will likely have to re-apply again for future fills. Prior authorization can take days to process. Within a week, the patient can call the pharmacy to see if the prior authorization request was approved. Unfortunately, the insurance carrier can deny prior authorization, and the patient may be left on the hook for the full out-of-pocket price of the drug.
Prior Authorization Got Denied?
If the patient believes that their prior authorization was incorrectly denied, they can submit an appeal. Appeals are the most successful when prescribing doctor deems treatment is medically necessary or there was a clerical error leading to your coverage denial. One of the best ways to build a strong appeal case is to get the doctor’s input. Ask them about any backup documentation or medical notes that could help to prove, the prescription is medically necessary.
If that doesn’t work, the doctor may still be able to help. Some tricks to save include: getting a prescription for a higher-dose pill (which you can cut half to save on cost), filling a 90-day supply (which can be cheaper than a 30-day supply), or getting free samples.