The Blue Cross and Blue Shield Association commissioned Milliman to examine the potential premium, member cost sharing, and service utilization impacts of removing prior authorization in the commercial market. Prior authorization (PA) is a tool widely used by commercial health plans to manage utilization of healthcare services. When effectively implemented, prior authorization can serve as a valuable cost-control and patient safety mechanism for plans, depending on the specific services subject to PA and the rigor with which authorization rules are applied. Yet PA also introduces administrative complexity and cost for healthcare providers and abrasion for patients seeking care. This paper focuses on the cost impact of PA to premiums and consumer cost sharing among 23 plans in the commercial markets.

This report was commissioned by the Blue Cross Blue Shield Association