On behalf of our member companies that provide more than 1 million jobs in the state and make the New Jersey Business & Industry Association the largest statewide business association in the country, we are writing to respectfully OPPOSE Assembly Bill 3176 (Conaway (D7); Jimenez (D32); Eustace (D38) ). This legislation deletes prior authorization requirements by certain insurers for accessing certain health care services.
Bypassing the prior authorization process increases costs and will potentially put patients at risk by eliminating an important “double check” of the data that ensures the right patient will receive the right medication at the right time.
Healthcare companies use prior authorization to verify that a drug, medical procedure, or treatments are medically necessary before they are performed or prescribed
Prior authorizations optimize patient outcomes by ensuring that they receive the most appropriate medication while reducing waste, error and unnecessary prescription drug use, which also helps keep healthcare costs in check.
There are many reasons an insurer may require prior authorization, including:
- branded drugs over generic alternatives
- advanced diagnostic imaging studies
- outpatient radiology
- medical procedures
- drugs that have dangerous side effects
The association places a strong and consistent focus on the quality and affordability of health insurance in New Jersey. The cost of providing health coverage to employees is one of the most significant challenges facing employers today. It is consistently ranked as one of the top concerns facing our members in our annual NJBIA Business Outlook Survey.
According to the 2018 NJBIA Health Benefits Survey, members, on average are spending $8,292 annually for employee-only plans. That’s compared to $7,044 for the same expenditures in 2016 – nearly an 18 percent overall increase.
Despite these costs, more than three-quarters of our members report providing health benefits to their employees. However, as costs continue to rise at a faster rate than general inflation, their ability to provide health benefits erodes. The percentage of employers who provide health benefits, while still very high, has dropped over the past two years.
It is therefore crucial that you consider the impact on cost and quality of the legislation that comes before you. NJBIA believes that the prior authorization process is an important tool in maintaining both and should not be eliminated in the circumstances outline in this bill.
For these reasons, we respectfully oppose this legislation. Thank you for your consideration of our comments.