Analysis of a Prescription Drug Prior Authorization Program in a Medicaid Health Maintenance Organization

OBJECTIVES: To determine the factors important in approving prescription reimbursement under prior authorization (PA) in a Medicaid managed care organization (MCO). METHODS: A cross-sectional statistical analysis was performed using administrative data for one month of PA requests to an MCO with more than 250,000 Medicaid recipients in the northeast United States. RESULTS: More than 95% of PA reviews resulted in payment for the originally prescribed products. The most common treatments involved were atypical antipsychotics, antacids, antidepressants, antihypertensives, anticonvulsants, and Cox-2 inhibitors. The rejection rate for nonformulary products was 7.1% while that for formulary products was 3.7%. Nevertheless, most drugs requiring PA were formulary-listed, with protocols to reinforce prescription guidelines. Rejection of reimbursement was inversely related to patient age. Most likely to be authorized were drugs for smoking cessation, pain, and nausea, while those least likely to be approved were multivitamins, sleep aids, and high-cost antidepressants. CONCLUSIONS: Although nonformulary products are more frequently subject to PA, 78.6% of PA procedures are performed in response to requests for formulary-listed products. The PA rejection rate for this Medicaid MCO was small; 4.4% overall and 7.1% for nonformulary versus 3.7% for formulary drugs.