Utilization Management: Prior Authorization, Step Therapy and Non-Medical Switching
Utilization management (UM) is a process used by healthcare insurers to evaluate the necessity, appropriateness, and efficiency of healthcare services provided to policyholders. Insurers claim to prevent overuse, underuse, or misuse of healthcare resources through these processes. However, UM processes question the judgment, experience, and knowledge of the healthcare provider and often undermine patient care.
Doctors and specialists spend years acquiring expertise to make informed decisions about patient care. When insurance companies require UM for treatments or prescriptions, it suggests that the provider’s judgment isn’t trusted, even though they are the ones who see and understand the patient’s unique medical needs. UM can undermine the provider’s role in guiding the patient toward the best treatment and jeopardize care when it is delayed or diverted (American Medical Association, 2020).
The time and administrative burden of obtaining UM leads to delays in care. What could be a timely and efficient treatment plan is often stalled for days or even months as providers navigate complex insurance processes. These delays can be especially harmful for patients with chronic diseases, as the postponement of care can worsen health outcomes and potentially lead to emergency visits or more invasive, costly procedures down the road (American College of Physicians, 2021). This prolonged decision-making time not only complicates the patient’s condition but also contributes to a less effective overall healthcare system.
The emotional and psychological toll on patients, their families, and healthcare providers is another major problem. Patients already dealing with illness or injury now face additional stress from navigating the often confusing and time-consuming prior authorization process. Family members may also become stressed, trying to ensure that treatments proceed as planned. Healthcare providers and their office staff are equally impacted, dealing with administrative paperwork and delays that detract from their ability to focus on patient care. This creates a hostile environment where trust between the patient and provider is eroded (CDC).
Prior Authorization
For patients with chronic health conditions, access to treatments and medications is one of the most important health management tools available. Prior Authorization (PA) is any process used by insurers or Pharmacy Benefit Managers (PBMs) to require insurer permission to access a treatment or test. Prior authorization has become a significant hurdle for both patients and healthcare providers, introducing a range of issues that undermine the fundamental doctor-patient relationship.
With Prior Authorization, providers see a patient and determine what they need but before they can access it the insurer must approve it. This can interfere with the patient’s health and the doctor-patient relationship. While it is designed to control costs and ensure the appropriateness of treatments, it often creates more problems than it solves, leading to delays in care, additional costs, and unnecessary stress on all parties involved.
In some cases, prior authorization leads to nonadherence to treatment plans. When insurance companies deny or delay approval for necessary care, patients may be forced to forgo treatments or medications or simply give up hope, worsening their health outcomes. For chronic conditions, this can mean missing out on effective therapies, which may lead to further complications or unnecessary emergency room visits (National Institutes of Health, 2020).
Prior authorization can also result in unnecessary treatment. Providers may be pushed to order less effective or more expensive alternatives simply to get approval from insurance companies, leading to treatments that are not in the best interest of the patient. This compromises the quality of care and increases overall healthcare costs (American College of Physicians, 2021).
While prior authorization was intended to reduce costs, it often exacerbates issues in healthcare by delaying care, raising costs, and diminishing the trust and communication between providers and patients. The process needs significant reform to ensure that healthcare remains patient-centered, timely, and effective.
Step Therapy
Step Therapy is a form of UM where the health plan or PBM attempts to control cost by insisting a patient try a different medication chosen by the insurer first. The patient must fail on the first medication before they can access the medication prescribed by the doctor. There could be several medications to “fail” before they can assess the prescribed medication. This “fail first” approach often results in reduced medication adherence and can lead to serious health risks while the patient goes through the steps and failures.
A “Fail first” approach means that a patient is not helped or has an adverse reaction to a treatment. This leads to delays in treatment or potential complications if the first-line treatments are not appropriate for the patient’s condition.
More than half the states have passed legislation authorizing an exception to step therapy. However, even if a state has exception legislation in place, it can’t address the issue when the patient is insured by an Employee Retirement Income Security Act (ERISA) health plan. Consequently, federal legislation is needed.
Non-Medical Switching
Non-medical switching refers to a practice by healthcare insurers where patients are required to switch medications or treatments for reasons unrelated to their medical condition or clinical needs, but rather due to cost-saving measures or changes in formulary coverage. This practice is often used by insurers to manage medication costs and encourage the use of lower-cost therapies or therapies that bring in more money for them or the PBM. This is particularly problematic because it often happens to patients who are stable on their current medication or whose health is improved by its use. While non-medical switching can help reduce expenses, it can also be challenging for patients if the new treatment is less effective or causes side effects, potentially affecting their health outcomes and overall treatment adherence.