Potential impacts on commercial costs and premiums related to the elimination of prior authorization requirements

Prior-authorization (PA) can be an effective cost-control tool used by payers in the managed care industry to optimize the utilization of expensive or low-value services. But PA can also increase the administrative burden, delay care, or lead to no treatment at all—increasing long-term costs. Blue Cross Blue Shield Association recently commissioned Milliman to model the potential cost impacts that can result from generally limiting or eliminating PA on the commercial markets in the United States. The main sections include: 

• An executive summary and background
• Medical and drug allowed cost results
• Range of impacts to premiums and member cost sharing

This report was commissioned by Blue Cross Blue Shield Association.