Tips for Smoothing the Time-Consuming Prior Authorization Process

Utilization Management Tools

Utilization management tools, which include prior authorizations, non-medical switching, medication quantity limits and step therapy requirements, are used by payers and pharmacy benefit managers (PBMs) to reduce their own costs, but in the process can also “restrict our ability as rheumatologists to prescribe the right medicine to the right patient at the right time, and interfere with the practice of medicine,” said Madelaine A. Feldman, MD, FACR, clinical instructor and assistant professor of medicine at Tulane University School of Medicine, New Orleans.

“Medication quantity limits are fine for safety purposes, but some PBMs use them to require you to go through their mail order service to get a 90-day supply. Often, if you utilize a local pharmacy you are allowed only a 30-day supply, or it may not count toward your deductible, and sometimes the drug may not be covered at all,” she said.

Non-medical switching occurs when a PBM changes a formulary for cost reasons, resulting in even stable patients having to change medicines because their current medication is now unaffordable or is no longer covered.

“They can switch the drug to a higher formulary tier. They can refuse to accept a patient’s co-pay card, or they can take the drug off the formulary altogether,” said Dr. Feldman. “This ignores the patient’s well-being and puts profitability first.”

Non-medical switching may lead to worse disease outcomes, flares or costly hospital visits, she said. A 2018 study by the Maine Bureau of Insurance showed the state’s insurers reported 300 formulary changes in just one quarter.³ “For those patients affected, 80% had increased out-of-pocket costs, whether it was for adding a prior authorization requirement, step therapy, higher tiering or the drug being dropped from the formulary. Higher out-of-pocket costs can also come from increasing use of other medications, such as antibiotics for infections.” Over half of coverage appeals were denied, the report showed.

Step Therapy Delays

Dr. Feldman

Step therapy, or fail-first policies, require patients to take drugs from a preferred list first. This preferred list, particularly for specialty drugs, may have a lower cost to the PBM, but can have a higher list price than some non-preferred drugs. Some step therapy policies may even require patients to fail several drugs with the same mechanism of action before allowing a more innovative drug to be used, she said.

The fact that step therapies are so varied among payers and PBMs suggests these policies are not based in clinical evidence and, in fact, are based on the profitability of the drug for the PBM. A PBM may receive kickbacks in the form of rebates and myriad fees to place certain drugs on formularies, she said. “In response, the PBM rewards certain manufacturers with preferred placement, and that’s the holy grail, because patients must step through your drugs.” When payers refuse to cover a patient’s drug or increase the cost share, patients may abandon treatment altogether, often leading to increased disease activity, she added.

Dr. Feldman co-authored a white paper based on a survey of 634 patients with rheumatoid arthritis, psoriasis, Crohn’s disease and other inflammatory conditions. Almost 40% of patients who stopped their treatments because of step therapy protocols said they did so because the drugs were ineffective, and 27% stopped taking their medication because their insurance company took it off the formulary, making it too expensive.⁴

Although step therapy may save some costs for the payer and lower overall drug utilization, it can negatively affect patients, according to Dr. Feldman. In a 2019 retrospective study comparing the effectiveness of medications for 3,993 patients with rheumatoid arthritis and 1,713 patients with psoriatic arthritis, patients whose plans had step therapy requirements reported lower treatment effectiveness, often due to low adherence to therapy.⁵

“PBMs constantly talk about cost savings, but it’s the cost to them, not the cost to our patients, who often have to pay a co-insurance on the list price of a drug while the PBM acquires it, on average, at 50% off of the list price,” said Dr. Feldman. “It has been shown that restrictive utilization management tools can force drug switching, increasing the risk of flares and adverse events.”

Get involved in ACR, ARP and state rheumatology association advocacy efforts to promote legislation to restrict these policies, said Dr. Feldman, who cited recent successes, including a new Illinois state law, HB 0465, that eliminates gag clauses that prevent pharmacists from advising patients about lower-cost treatment options, eliminates co-pay accumulators and requires more transparency on the activities of PBMs.⁶

Learn how you can become an advocate for your practice and your patients in the ACR’s Legislative Action Center.