Information, Spillovers, or Hassle Costs? Effects of Medicaid Prior Authorization on Preschool Antipsychotic Prescribing

Janet Currie and Kate Musen

No 34369, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine information versus hassle costs in the context of Medicaid prior authorization requirements for preschool antipsychotic prescribing. Such prescribing increased in the 1990s, despite substantial side effects and the absence of FDA approval. State Medicaid programs began to require prior authorization for antipsychotic prescribing to young children after 2005. We evaluate these policies using hand-collected policy data and national prescription data for 2006-2019. We find that prior authorization reduced prescriptions to children under six by 22-30% in the two years after implementation. There were no effects on privately insured or older children, suggesting little role for information spillovers.

JEL-codes: I12 I13 I18 (search for similar items in EconPapers)
Date: 2025-10
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