The Special Authorization process saves employers and insurers money, but at what cost?

Healthcare receives a lot of media coverage, so it’s easy to assume that this area of public debate is well understood. But as is often the case, there’s more to the book than its cover.

The lack of understanding around healthcare is nowhere more evident than in the area of employersponsored drug plans. The fact that no two plans are the same adds to the confusion. Plans offered by certain companies offer coverage for certain disease states, while others do not. In addition, insurers sometimes won’t pay for coverage of certain drugs unless patients can demonstrate that they really need them—a process called “Special Authorization.”

Since the insurer is the vehicle through which the employer provides benefits to employees, Special Authorization actively involves both the insurer and the employer in the doctor/patient relationship. Special Authorization is often justified on the basis that patients get the best care when they receive the most appropriate drug, which is not necessarily the most expensive drug. But it’s easy to see another motivation for having a Special Authorization process in place: to save money.

If the main purpose of Special Authorization is to ensure that patients get the best care with the most appropriate treatment, how does an insurance company make this determination? Is it actually possible to make such a determination after the patient’s physician has examined the patient, made a judgment and issued a prescription for a particular drug? In the Special Authorization process, does the insurer have specialized medical expertise? Does the insurer follow and measure the progress of the patient? And does the process allow for the patient to receive the more expensive drug if it is indeed the most appropriate treatment?

From a legal perspective as well as from the patient’s viewpoint, these are not merely academic questions. If an insurer can’t demonstrate that it has adequately considered these questions, then it would seem that the sole purpose of the Special Authorization process is to save money. And if this is the case, the risk from a human rights perspective increases.

Even more important, the delay in getting the right treatment can have serious consequences for the patient—for example, in the case of rheumatoid arthritis(RA). Cheryl Koehn, president of Arthritis Consumer Experts, offers a patient’s perspective on the disease.

“RA is an autoimmune disease that mostly affects women between the ages of 30 and 50. In the majority, the disease attacks swiftly and, if it is not treated quickly, permanently kills and damages cartilage, bones and joints—damage that cannot be reversed if appropriate and adequate care is not given quickly.”

Furthermore, Special Authorization is not always a one-time event. Koehn also notes that RA patients are often required to go through the process many times for drugs in the same class, which suggests that at least in some cases, Special Authorization does not always deliver the best treatment.

Another question that arises is why is RA treated differently than other autoimmune diseases? If it is treated differently because the treatment is expensive, this strategy gives rise to significant human rights concerns. Once a benefits plan is offered, employers must ensure that the plan complies with human rights legislation. Treating RA patients differently because the drug they require costs more could constitute discrimination, especially if the Special Authorization process cannot withstand scrutiny.

Given the potential for human rights concerns, employers are advised to review their benefits plans and ask if there is a Special Authorization process in place for any products, as well as the scientific basis for any such process.

Hugh O’Reilly heads the pension and benefits practice group at Cavalluzzo Hayes Shilton McIntyre & Cornish in Toronto.

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© Copyright 2007 Rogers Publishing Ltd. This article first appeared in the November 2007 edition of BENEFITS CANADA magazine.


Copyright © 2020 Transcontinental Media G.P. This article first appeared in Benefits Canada.

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