Prior Authorization
A requirement by an insurer that a patient's doctor must get approval before the plan will cover a specific drug — used to control costs and ensure appropriate use.
How It Works
Prior authorization (PA) requires the prescriber to submit clinical documentation proving the drug is medically necessary for the patient. Insurers use PA to steer patients toward lower-cost alternatives or ensure expensive drugs are used for appropriate conditions. While PA can reduce unnecessary prescribing, it also creates delays: the American Medical Association reports that 94% of physicians say PA delays access to necessary care. Some states have enacted PA reform laws requiring faster response times and banning PA for certain medications.
Related Terms
- Formulary — A list of prescription drugs covered by an insurance plan, organized into tiers that determine how much the patient pays for each drug.
- Step Therapy (Fail First) — An insurance requirement that a patient must try and fail on one or more lower-cost drugs before the plan will cover a more expensive medication.
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About This Definition
This definition is part of the DrugPrice Drug Pricing Glossary — 34 terms explaining how prescription drug pricing works in the United States. All definitions are written in plain language for patients, caregivers, journalists, and healthcare professionals.