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Prior Authorization for Medications in Medicare Ends Up Increasing Costs

April 20, 2020

Providers have long considered prior authorization requirements to be a major barrier to evidence-based treatment for opioid use disorder (OUD), and a study released today bolsters that view in examining the effects of such restrictions on an often overlooked population.

Published as an open access article in JAMA, the study covering the period from 2012-2017 found that removing prior authorization requirements for OUD medication treatment in Medicare plans was associated with a doubling of buprenorphine-naloxone prescriptions per plan per year on average. Each filled prescription was associated with a significant decline in adverse outcomes, including inpatient admissions and emergency department visits. This translated to a 2.4% decrease in non-drug health care spending for each additional prescription filled.

Conversely, adding prior authorization to Medicare plans was associated with a 10% increase in both inpatient admissions and emergency department visits related to a substance use disorder, the researchers reported.

In essence, a measure that payers impose to reduce costs “ends up costing the plan more money,” lead author Tami L. Mark, PhD, senior director of behavioral health financing and quality management at RTI International, tells Behavioral Healthcare Executive. “Any savings you get on the prescription drug side are lost on the hospital and emergency side,” Mark says.

Medicare's impact

The effect of insurance restrictions on substance use disorder treatment for the Medicare population has generally received less attention than what is given to the Medicaid and private insurance markets. Opioid use disorders in older adults often go undiagnosed, Mark says, partly because of the widespread but clearly mistaken notion that “you couldn't possibly have an opioid use disorder if you're an older adult.”

Examining policy in Medicare Part D plans also carries great importance because these provisions also apply to Medicare/Medicaid dual eligible clients who tend to have a high number of comorbid conditions, Mark says. In addition, many of the large national Part D plans are managed by the same insurers that are most prominent in the private insurance market, so “what they're doing in one often reflects what they're doing in the other,” she says.

The mean age of individuals comprising the population in the review of Medicare claims data was 57. The researchers found that adding a prior authorization requirement to Medicare plans resulted in a 60% drop in total buprenorphine prescriptions per plan per year, and a 15% decline in new prescriptions. In turn, both emergency visits and inpatient admissions were found to increase. “Access has a strong effect,” Mark says.

Removing prior authorization, on the other hand, led to a 28% increase in new prescriptions for buprenorphine, the researchers found.

“Considering the observed increasing rates of OUD in the Medicare population, and previously documented underutilization of medications for the treatment of OUD in the Medicare population, these results suggest that improving access and uptake of these medications could improve the health care outcomes of hundreds of thousands of Medicare beneficiaries,” they wrote.

There have been some recent moves in state government to eliminate prior authorization for MAT as part of the strategy to combat opioid addiction and overdose. Mark adds that while the Centers for Medicare & Medicaid Services (CMS) has been communicating its desire to see these restrictions removed, “There is still a fair amount of this going on” across the insurance industry.

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