Healthcare Technology Featured Article

September 22, 2016

Taking Electronic Prior Authorization to the Next Level

An increasing number of medications require preapproval—or prior authorization (PA) — from payers before they can be dispensed. This traditionally has been a cumbersome, time-consuming and frustrating manual administrative process. The reason: PA was based on numerous phone calls and faxes — plus the exchange of lots of paper — among physicians, pharmacies and payers. Recognizing that there has to be a better way, the electronic prescribing (ePrescribing) industry developed an electronic prior authorization (ePA) standard to be incorporated into the electronic health record (EHR) work flows of physicians, pharmacies and payers. The standards development work came to fruition a couple of years ago.

As a result, the issue isn’t about the standard as much anymore. Rather, the discussion is about adoption. What will it take to move the ePA adoption needle forward?

The business case. The business case for ePA seems pretty clear. According to data from CoverMyMeds, PA volume is increasing 20 percent each year. This is due to the rising number of chronically ill and elderly coupled with increased availability of very expensive drugs. These include many new specialty medications, nearly all of which require PA.

There are significant administrative costs associated with manual PA processing, which can be mitigated by computerized processing. According to a recent article in Health Affairs, physicians spend the better part of $37 billion annually ($83,000 per doctor) thrashing out PA and formulary issues with payers. According to another estimate, doctors spend 868.4 million hours on PA each year — not counting the time devoted by other staff members. 

Handling PA requests also represents an equal administrative burden on pharmacies and payers, which similarly translates into time and money.  

ePA reduces the time spent on each PA. According to a survey by the American Medical Association, most physicians experience a delay in excess of a week for their PA request to be processed. In contrast, ePAs often can be processed within hours when payers are equipped to electronically accept and process PA requests as well as return real-time responses.

Perhaps most importantly, the difficulties inherent in trying to obtain a PA significantly affect patient care and safety. As conveyed in the ePA National Adoption Scorecard, nearly 40 percent of PA requests (roughly 75 million) annually are abandoned due to complex procedures and policies and the hassle factor. Moreover, nearly 70 percent of patients encountering paper-based PA requests do not receive what was originally prescribed. This additionally has implications for pharmaceutical brand teams.

Barriers to adoption.  While health care is moving steadily toward ePA adoption, there are barriers.

For example, about 80 percent of physician offices have adopted EHRs enabled for ePrescribing. However, not all EHRs are enabled for ePA. According to a survey by CoverMyMeds, 79 percent of EHR vendors (but only half of the top 15 companies) are committed to ePA. About half overall have gone live with the transaction, but only a third of the top 15.

One challenge is that payer information about PA is not always accurate or complete in EHRs. For example, there are inconsistencies in the formulary and benefit files that are critical to determining whether PA is needed by a payer for a specific drug for a particular patient. As a result, EHRs can’t display an indicator that PA is necessary. When the prescriber unknowingly orders a medication that requires PA, a manual process ensues instead of an electronic transaction as part of the ePrescribing process.

Forward progress. In an attempt at automation, many payers offer websites and portals that provide information about the company’s PA requirements and can be a way to submit the PA request. To use these portals, physicians must look up the website for each payer and consult it each time PA is needed. Because these portals are not connected to the physician’s EHR, information must be transcribed manually from the EHR to the payer’s portal. This is yet another major drag on expenses and administrative overhead. We also have heard reports that there is no way to ensure that ePA requests are processed successfully via portals and there rarely is a mechanism for follow-up.

States have begun to address ePA, but it’s a hodgepodge of laws and regulations. For example, states are taking varied and specific approaches to defining and solving the PA challenge, which may include standardizing paper PA forms and mandating ePA. It’s an evolving landscape that is a pain point for vendors, physicians and pharmacies.

The promise of ePA as part of the EHR ePrescribing work flow is that prescribers will see that PA is required prospectively — that is, at the time that the prescription is written. The prescriber will also know which questions need to be answered before the prescription is sent to the pharmacy. In many cases, the information needed is already documented in the EHR. The few remaining questions will need to be answered by data entry. The bottom line is that the need for data entry is significantly reduced.

Taking ePA to the next level. So, what will it take to move the ePA adoption needle? Here are a few thoughts.

  • Physicians should be educated that ePA exists and know the particulars about its availability in their EHR. This is especially true in value-based care organizations, whose use of ePA could help them meet cost and quality targets.
  • Physicians should use the ePA functionality that is available, even if it is not fully integrated.  Payers may hesitate to invest in new ePA technologies if they don’t see adoption of the basic tools available today. Adoption = interest = investment.
  • With that in mind, vendors should understand that ePA adoption is on the rise—and should snowball as physicians see the benefits.  CoverMyMeds points to one health plan, in which more than two-thirds of its prescribers adopted the company’s ePA solution since the beginning of this year.  What’s more, ePA resulted in a 39 percent increase in autoapprovals and a 40 percent decrease in PA reviews.
  • Payers should conduct outreach to vendors regarding their ability to handle ePA. According to a survey by CoverMyMeds, some nine out of 10 payers have committed to ePA and two-thirds are live. This will resonate with vendors, who build to suit customer demand.
  • Physicians also should request that their EHR vendors integrate ePA. Vendors are responsive to users’ expressed needs, and this demand will stimulate activity.
  • Some use cases for the National Council for Prescription Drug Programs’ ePA standard still need to be developed to the maturity level of prospective ePA between the provider and pharmacy benefit manager.  Examples include pharmacy-to-payer transactions and those to support hub involvement.
  • Specialty pharmacy should accelerate its move to computerization. Specialty pharmacy currently is mired in the antiquated paper-phone-fax processes for prescriptions and PA. Yet specialty medications represent the fastest growing sector in pharmacotherapy. Use of specialty medications was expected to jump by two-thirds in 2015 and account for half of all drug costs by 2016. Since nearly all specialty medications require PA, there is a business case for specialty pharmacies to rapidly move forward with ePrescribing and ePA.

Physicians should pressure states to adopt uniform ePA requirements. State mandates requiring support of EHR-initiated ePA have begun to appear. Physicians could advocate for related requirements, such as timely responses to PA requests, similar to the prompt payment rules that exist in most states. Wider regulatory requirements will motivate EHR vendors and payers to hasten their development of ePA functionality to meet the rules. 

Edited by Alicia Young
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