How the Traditional PBM Prior Authorization Process Does NOT Work

This video provides an in-depth analysis of the dysfunctional traditional Prior Authorization (PA) process managed by Pharmacy Benefit Managers (PBMs) and its detrimental effects on patient care and physician workflow. The speaker, Dr. Eric Bricker, a healthcare finance expert, opens the "black box" of PBM operations, focusing on the three major players: CVS Caremark, Express Scripts, and OptumRx. The core message is that while PAs are intended to curb overprescribing, the current manual, bureaucratic process introduces dangerous delays and adverse health outcomes, ultimately failing both patients and providers.

The analysis meticulously details the steps of the traditional PA workflow, highlighting its inherent inefficiencies. The process begins with the doctor determining the need for authorization, followed by submission, often via archaic methods like fax or a basic online form. A critical bottleneck occurs when PBM technicians must manually enter the information from the faxed documents into their internal PA systems—a step the speaker emphasizes is still common practice. This is followed by a PBM pharmacist review. If denied, the request is sent back, often leading to an escalation to a medical director. Even when the process runs smoothly, the inherent delays—typically one to three business days—can significantly impede patient access to necessary medication.

The video connects these procedural failures directly to negative patient outcomes, citing alarming statistics. According to physician reports, 25% of doctors state that prior authorizations have caused adverse health events in their patients, and 16% report that PA delays have resulted in unnecessary patient hospitalizations. The speaker argues that PBMs, despite their stated goal, are making people sicker, not better. The underlying justification for PAs is rooted in the belief held by the ultimate payers (employers and governments) that doctors overprescribe. This concern is partially validated by data showing that 40% of older Americans take five or more prescription medications daily, a 300% increase over the last two decades, leading to over a quarter of a million hospitalizations annually due to adverse drug events. This creates a critical tension: PAs hurt patients through delays, but overprescribing hurts patients through adverse events. A nascent solution mentioned is the implementation of state-level "Gold Card" programs, which exempt physicians with consistently approved PA histories from future authorization requirements, offering a small step toward balancing autonomy and oversight.

Key Takeaways: • The traditional Prior Authorization (PA) process is highly manual and inefficient, often relying on outdated technology like fax submissions, which necessitates PBM technicians manually transcribing data into internal systems. This manual data handling is a significant source of delay and error. • PBMs, including the "big three" (CVS Caremark, Express Scripts, and OptumRx), control medication payment decisions and are responsible for managing the PA process, which creates significant friction between providers and payers. • PA delays typically range from one to three business days, which can critically postpone patient care, particularly for acute or time-sensitive conditions, leading to potential harm. • The adverse impact of PA delays is substantial: 25% of doctors report that PAs have caused adverse health events in their patients, and 16% report that medication PA delays have resulted in unnecessary patient hospitalizations. • The core justification for PAs is the payer's (employers and government) concern over physician overprescribing, a concern supported by statistics showing a 300% increase in polypharmacy among older Americans over 20 years. • Polypharmacy is a genuine patient safety issue, contributing to over 250,000 hospitalizations annually for older Americans due to adverse drug events, highlighting the complex trade-off between curbing overprescribing and ensuring timely access. • The escalation process for denied PA requests involves sending the denial back to the doctor, who must then typically disagree and escalate the request to a PBM medical director, adding further administrative burden and time to the process. • State-level "Gold Card" programs are emerging as a potential solution to streamline the process by exempting physicians who have a proven track record of consistently approved PA requests from future authorization requirements. • The current system forces physicians to navigate excessive administrative hoops, distracting them from patient care and creating financial disadvantages, as PBMs control the financial flow for medication approval.

Key Concepts:

• PBM (Pharmacy Benefit Manager): Departments within large health insurance companies (or standalone entities) responsible for managing prescription drug benefits, including formulary management and controlling whether a medication will be paid for.
• Prior Authorization (PA): A requirement by the PBM that a physician must obtain approval before prescribing certain medications, intended to ensure medical necessity and control costs.
• Polypharmacy: The concurrent use of multiple medications by a patient, often defined as five or more, which significantly increases the risk of adverse drug events (ADEs).
• Gold Card Program: A regulatory or contractual mechanism, typically implemented at the state level, that exempts high-performing physicians (those with consistently approved PA requests) from the mandatory prior authorization process for certain drugs.