Why Your Medication Needs Approval

What is prior authorization?

Prior authorization (also known as pre-authorization or pre-approval) is a formal requirement from your health insurance plan that your doctor must obtain “permission” before a specific medication, procedure, or service is covered.

This allows your insurer to check that a proposed treatment plan will be covered under your plan by ensuring that it’s cost-effective and medically necessary. For example, while a doctor may prescribe an expensive brand-name drug, the insurer may cover an equally effective generic alternative, which will be cheaper.

In general, insurers should return a decision within 7 days of a request. For urgent requests, they should return a decision within 72 hours.

Here is how the process works:

• Prescription: Following a diagnosis, your doctor prescribes a specific medication for your condition.
• Request: The doctor’s office will then submit clinical notes and a justification for prescribing this specific medication to your insurer.
• Review: A team at the insurance company reviews the request to ensure that the medication is necessary for your condition.
• Decision: The request is then approved, where you just pay your standard copay; pended, where the insurer will ask for more information; or denied, where you’d need to pay out of pocket for the medication. If a drug is denied, you have the right to appeal.

The prior authorization process can be time consuming and frustrating, especially if coverage is denied. However, it also has several benefits, according to a 2020 article:

• Cost: Prior authorization helps reduce overall drug spending by ensuring the most cost-effective medications are used.
• Effectiveness: It can ensure that the most clinically effective medications are used.
• Safety: Misuse of prescription medications, such as opioids, is common, and requiring prior authorization for medications like these may help identify cases of misuse early.
• Supporting formularies: Insurers generally have lists of preferred drugs called formularies. Certain drugs might be preferred due to cost, efficacy, treatment guidelines, or rebate programs. Supporting drug formularies and rebate programs may help lower the cost of premiums.

What medications usually need prior authorization?

Not all medications and services require prior authorization. Every insurance plan will have its own unique formularies, which are the lists of all the covered drugs. Formularies are generally split into tiers, with higher-tier drugs generally requiring prior authorization.

The following categories of drugs are more likely to require prior authorization:

• Specialty drugs: Specialty drugs are usually complex medications for rare or chronic conditions. They’re often injected or infused, and they’re typically more expensive. Because of their high costs, insurers want to make sure they’re necessary and that the condition can’t be treated by other medications. Examples include Humira, Skyrizi, and chemotherapy drugs like Keytruda.
• Weight loss medications: As medications like GLP-1s are becoming more and more popular for weight loss, they’re more likely to need prior authorization. Insurers will generally check that GLP-1s like Ozempic and Mounjaro are prescribed for approved uses, such as blood sugar management.
• Controlled substances: Controlled substances that have a higher chance of misuse may require a pre-check from insurers. These include strong pain medications or medications for attention deficit hyperactivity disorder (ADHD) like Adderall or Vyvanse.

What happens if coverage is denied?

If coverage is denied, you can typically appeal the decision. This might mean your doctor will need to send more information proving that the medication is necessary for your condition.

In some cases, insurers may require that you try something called step therapy before approving a specific treatment. This generally involves trying cheaper, more common options and proving that they didn’t work for you before a more expensive therapy is covered.

If your insurer continues to deny a medication, you can still access it, but you’ll need to pay for it out of pocket. You can also speak with your doctor, who will work with you to find an alternative that works for you. This may mean looking for a generic equivalent or another type of therapy.

The takeaway

Some medications may need extra approval from your insurer before they’re covered under your health insurance plan. This involves checks to ensure that a medication is the most appropriate, cost-effective drug for your condition.

The prescribing doctor will usually handle the authorization process for you. And if your claim is denied, you can appeal it.

For further support with prior authorization, you can speak with your doctor. You can also reach out to your insurer for more information on your plan and which drugs are more likely to be covered.