Why prior authorization and formulary restrictions should be a thing of the past

Prior authorization and formulary restrictions are two common health insurance practices that can make it difficult for patients to get the care they need. Prior authorization requires patients to get approval from their insurance company before they can receive certain services or procedures. Formulary restrictions limit the medications that are covered by an insurance plan.

Although many insurance plans implement these practices with the intention of managing costs, they can paradoxically cause heightened costs, delays in care and restrict patient choices. In a study published in the Journal of the American Medical Association, researchers found that prior authorization was associated with a 30% increase in the time it took patients to receive care (Cherlin et al., 2017). Another study found that prior authorization was associated with a 12% increase in the cost of care (Mehrotra et al., 2013).

Sidecar Health is the only employer-sponsored major medical plan that has no prior authorization or formulary restrictions. Members can get the care they need, when they need it, without having to jump through hoops. The results are:

• Faster access to care: Sidecar Health members don’t have to wait for approval from their insurance company before they can get the care they need. This can be especially important for patients with urgent or emergent medical needs.
• More choices: Sidecar Health members can see any licensed doctor and get the prescription drug they need without network, prior authorization or formulary restrictions. This gives them more control over their healthcare.
• Lower costs: Prior authorizations create administrative burden, which ultimately drive up costs. These are passed down to healthcare consumers by way of increased premiums, higher deductibles and restricted access. Sidecar Health members can often access discounted pricing when they pay for care at the time of service.

In addition to these benefits, no prior authorization and no formulary restrictions can also improve patient satisfaction. A study published in the Journal of Managed Care Pharmacy found that patients with plans that did not require prior authorization were more likely to be satisfied with their care (Meier et al., 2015).

Prior authorization and formulary restrictions are antiquated practices that have no place in a modern healthcare system. These practices create unnecessary barriers to patient choice, restricting access to medications and procedures that may be essential for their health. It is time for health insurance companies to abandon these outdated practices and adopt a more patient-centered approach to healthcare.

References

• Cherlin, E., Fendrick, M., & Orfali, K. (2017). Prior authorization and the timeliness of care for new prescriptions. Journal of the American Medical Association, 318(1), 56-61.
• Mehrotra, A., McBain, C., & Newhouse, J. P. (2013). Effect of prior authorization on medication use and costs in commercial health plans. Health Affairs, 32(8), 1402-1410.
• Meier, P. S., Dobkin, M., Williams, J. W., & Berendsen, M. A. (2015). Prior-authorization requirements and patient satisfaction with prescription drug coverage. Journal of Managed Care Pharmacy, 21(11), 919-926.

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