Study analyzes the benefits and harms of prior authorization policies for Medicare

Reviewed by Emily Henderson, B.Sc.Oct 3 2022

A new study published in today's issue of the Journal of the American Medical Association (JAMA) analyzes the benefits and harms of prior authorization (PA) policies for Medicare and the impact these policies have on patients and clinicians.

Specifically, the study looks at the policy care delivery in Medicare Advantage (MA), which covers more than 48 percent of Medicare beneficiaries and can affect clinical operations.

There's currently a lot of discussion about modernizing and monitoring the use of PA in Medicare to serve patients and the whole health care system better. We hope by describing the theoretical goals of prior authorization and where implementation is failing to meet these goals and the needs of Medicare beneficiaries, we can provide decision-makers a comprehensive accounting of the system and opportunities to improve it."

Kelly E. Anderson, PhD, MPP, Lead Author, Assistant Professor, University of Colorado Skaggs School of Pharmacy and Pharmaceutical Sciences, University of Colorado Anschutz Medical Campus

The paper discusses the policy's impact on the many stakeholder groups, including patients, clinicians, MA insurers and the Centers for Medicare and Medicaid Services.

Anderson and her co-authors say if PA policies are employed effectively, it can be a powerful lever to improve the appropriateness of care, reduce overuse and contain burgeoning healthcare costs.

However, they call out that frequent misapplications of the PA process have resulted in serious harm to patients and unnecessary care delays, which can be expensive in the mid-to-long term and undermine patient and clinician confidence in the process.

Additionally, from the perspective of clinicians and healthcare centers, they report the policy presents a substantial administrative burden and roadblocks to providing care for patients. For example, clinicians have raised concerns about critical healthcare decisions for their patients being decided on by non-practicing clinicians or those with inadequate clinical expertise in the specific clinical domain.

To address these issues, the researchers outline several proposed measures to help improve the use of PA in Medicare. Such as utilizing an electronic based PA process with time-bound requirements for initial and appeal decisions. As well as reporting PA denial rates to the Centers for Medicare and Services, to name a few.

The paper concludes that by improving transparency and accountability of the PA process, the policy can better function as a tool to improve high value care for Medicare beneficiaries.