By Jocelyn Keegan, Payer Practice Lead
Payer interest is growing in electronic prior authorization (ePA). Initially, in many organizations, automation largely replicated the paper process requiring duplicate entry of information. But now there continues to be real progress towards a standards-based, real-time ability to prospectively handle prior authorizations (PAs) electronically as part of the electronic prescribing process. Industry efforts, provider pushback and regulations are accelerating adoption.
These activities are reviving interest among most payers, but many don’t know where to focus. In fact, the landscape is dotted with plans at various points in the ePA evolution. In reality, there are early adopters, mature automated payers and payers whose maturity can vary widely based upon line of business. And, to be frank, not all these transitions are going as well or smoothly as they could. Progress in the industry is accelerating, with new standards and use cases emerging to solve some existing challenges and medications left out of the process, not to mention the increasing impact of federal and state mandates.
So, where do payers start? Here are 10 things payers need to know to successfully implement ePA. Payers must understand:
Further, the time and costs associated with PA will increase along with the rapidly accelerating growth of expensive specialty medications. These are being developed and dispensed to treat an increasing population with chronic conditions, which also is on the rise. Some 60% of Americans have a chronic disease and 40% have two or more. Although specialty medications make up only about 1% of prescriptions, they result in between 32% (Medicare) to 41% (Medicaid) and 42% (Commercial) of drug spend. Nearly all require PA that remain almost exclusively manual in nature due to the lag in adoption in ePA by medical payers for complex medications.
And, as always, there is medication nonadherence. PA plays a role. Some 37% of PA requests (roughly 75 million) annually are abandoned due to complex PA procedures and policies and the hassle factor. As a result, patients do not benefit from their ordered therapies. According to a recent estimate, medication nonadherence causes some 125,000 deaths, untold disabilities, as well as 10% to 20% of hospitalizations and nursing home admissions each year. This adds up to between $100 billion and $289 billion annually. These economic burdens fall heavily on payers’ shoulders.
Want to know more? Point-of-Care Partners (POCP) is actively involved in both pharmacy and medical ePA development. We are monitoring growth across the technology landscape and have unveiled a value model based on adoption horizons as well as an in-depth report on ePA. Our Regulatory Resource Center is tracking ePA legislation and regulations at the state and federal levels. Send the staff an email (firstname.lastname@example.org) for a consultation. POCP is uniquely positioned to help your organization better understand ePA and make it work for you. Let me know how we can help. Reach out to me at email@example.com.