Optum Rx says it will eliminate some prior authorization requirements

Dive Brief:

• Optum Rx is moving to eliminate prior authorization requirements for dozens of drugs, the UnitedHealth-owned pharmacy benefit manager said Wednesday, easing a key pain point for physicians and patients at a time of widespread discontent with healthcare middlemen.
• Starting May 1, Optum Rx will eliminate reauthorizations — when drugs already being used by a patient need to be reapproved by their plan — for roughly 80 drugs. The program will cut up to 25% of all reauthorizations, or 10% of prior authorizations overall, the PBM said.
• The drugs included treat high cholesterol, lung disease, multiple sclerosis, migraines and other conditions. Optum Rx said it plans to apply the policy to additional drugs in the future.

Dive Insight:

Prior authorization requires doctors to get approval from a patient’s health or drug plan before providing a medical service, like performing surgery or prescribing a medication. Insurers and PBMs argue prior authorization is important to reduce nonessential healthcare costs and ensure treatment is safe and effective.

However, doctors say the process increases paperwork burden and delays care plans. Some patients have experienced severe health outcomes or even died following prior authorization holdups.

As a result, pressure has been rising on health and drug plans to roll back the policies. In the past few years, a number of major payers have walked back prior authorization requirements, including Optum Rx’s sister company UnitedHealthcare and CVS-owned Aetna.

Still, physicians argue more reform is needed — especially as payers automate prior authorization processes, sparking concerns about algorithms driving improper denials.

Reauthorizations are occasionally necessary to ensure that the ongoing use of drug is safe, that the current dosage is appropriate and that a patient doesn’t need additional testing, according to Optum Rx. But for many drugs, there is “minimal additional value” in reauthorization, the PBM said in its Wednesday statement.

Nixing reauthorizations is meant to simplify patient experiences, expand access to medications and reduce work for pharmacists and doctors, Patrick Conway, the CEO of Optum Rx, said in a statement.

Drugs included in the program don’t present an added safety risk for patients, have established long-term effectiveness and constant dose requirements, a spokesperson for the PBM said.

Patients using the drugs also have to have an established diagnosis of a chronic condition, and have considered alternative therapy for authorization to be waived.

Future drugs that will be considered for the program will follow the same clinical criteria, the spokesperson said.

Reducing prior authorizations can also be viewed as a public relations move by Optum Rx, one of the so-called “Big Three” U.S. PBMs that have been targeted by antitrust regulators and lawmakers for their alleged role in driving up drug costs.

Critics of major PBMs point to opaque contracts, rebating practices and significant market consolidation in calling for Washington to curb the drug middlemen. However, despite rising momentum on the Hill resulting in a number of proposed bills and an ongoing legal spat with the Federal Trade Commission, concrete changes have yet to be imposed on PBMs.

Spurred by public pressure, major PBMs including Optum have announced a number of internal changes that they say make them more straightforward and effective.

In doing so, they’re likely seeking to protect lucrative businesses from external reform. Optum Rx, for example, brought in $5.8 billion in profit last year, almost one-fifth of UnitedHealth’s overall operating earnings

In January, Optum Rx announced it would phase out models that allow it to retain savings from negotiations with drugmakers over the next three years.

Optum Rx, Cigna-owned Express Scripts and CVS-owned Caremark have also launched “transparent” PBM models based on the net cost of drugs, a move analysts say is likely in response to client ire over confusing business practices and meant to offset political and regulatory scrutiny.

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