Reform prior authorization – don’t eliminate it
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If you or someone you know has ever experienced the frustration of a delayed medical procedure or a denied prescription due to prior authorization, you’re not alone. The struggle with paperwork, waiting for approval and resulting delays in care are all too familiar to many of us.
That’s why Indiana lawmakers are considering two significant pieces of legislation focused on prior authorization: House Bill 1003 and Senate Bill 480. Though both seek to address concerns about the system, they take drastically different approaches. House Bill 1003 offers targeted, common-sense reforms that streamline prior authorization and improve transparency, while SB 480 would significantly limit the effectiveness of prior authorization – a move that would increase healthcare costs.
Prior authorization serves an important purpose. It is one of the few tools to keep healthcare costs in check, ensuring that treatments are medically necessary and cost-effective. Prior authorization can direct patients toward clinically proven, lower-cost medications, reducing prescription costs by as much as 80%. It also ensures that advanced imaging services, like MRIs and CT scans, are obtained at facilities offering the best patient value. The price of an MRI, for example, can vary by hundreds to thousands of dollars within the same city for the same scan.
The financial implications of limiting prior authorization are significant. According to a 2024 report, Indiana’s employer-sponsored health plans could see costs increase by up to $241 million annually, potentially leading to raised premiums or reduced benefits. Similarly, Indiana’s Medicaid program could face an additional $395 million in costs each year, putting a strain on the state budget and diverting resources from other essential services.
While it’s clear prior authorization is not perfect, we should strive to make it more efficient and patient friendly, offering hope of a better system for everyone.
House Bill 1003 takes the right approach by implementing common-sense reforms to reduce delays and improve fairness. It establishes clear approval timelines and safeguards against retroactive claim denials, ensuring that sudden reversals don’t blindside patients and providers. The bill also requires that prior authorization decisions be reviewed by a medical professional with expertise in the relevant field, preventing unqualified denials that delay necessary care.
Indiana lawmakers have a critical choice to make. They can limit prior authorization, drive up costs and reduce patient safeguards, or they can reform it correctly through the thoughtful changes proposed in HB 1003.
Patients deserve faster, fairer, more transparent medical care. They also deserve protection from runaway healthcare costs. The best way to achieve both goals is to fix prior authorization with HB 1003, not abandon the practice altogether.
David Ober is senior vice president of business operations and finance at the Indiana Chamber of Commerce.