Unseen costs of prior authorization

Prior authorizations are often used as a cost containment tactic by payers — and it works in reducing the amount that the payer must pay for the PA drug (i.e. in financial terms, the line item goes down).

However, decreases in the line item are showing up somewhere else.

At a study conducted at the University of Alabama at Birmingham HIV/AIDS outpatient clinic, the PA process imposes uncompensated costs to medical providers. The study found that the overall cost was $41.60 per PA.

Additionally, the researcher concluded the PA process “significantly delays medication accessibility for patients and imposes high costs that negatively impact operating margins for health care providers”.

Yes, payers need to make a profit — they are businesses after all — but, what’s the answer?

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