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Biopharma: Electronic Prior Authorization

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HIT Perspectives Biopharma Insights – September 2016

Electronic Prior Authorization: Just What the Doctor Ordered (Almost)

By Brian Bamberger, Practice Lead, Life Sciences

An increasing number of medications require preapproval — or prior authorization (PA) — before they can be dispensed. This currently is a lengthy and frustrating process that is based on antiquated paper-phone-fax methods. It’s an administrative nightmare that results in abandoned prescriptions, changes from the originally prescribed medication, and delays in dispensing and treatment. In addition to being a huge pain point for physicians and patients, PA is also a problem for pharmaceutical companies, which lose millions of dollars annually as a result.

That’s changing with the advent of electronic prior authorization (ePA) — the electronic prescribing (ePrescribing) capabilities for which doctors have long been waiting. ePA was created by the ePrescribing industry, which developed a standard that could be incorporated into the electronic work flows of physicians, pharmacies and payers.  That decade-long work came to fruition a couple of years ago. Now that ePA’s available, expect to see more and more practices use the transaction in their ePrescribing.

How does PA work? There are two kinds of work flows used today.

The first is retrospective PA. This means that drugs needing prior approval are identified after they have been prescribed. This involves form-based portal solutions, which are not integrated into the ePrescribing work flow. In order to process a retrospective PA, prescribers must identify and logon to the portal associated with an individual patient’s health plan. This can be very frustrating and time consuming — especially in high-volume practices. There are “hybrid” solutions out there; these, however, have varying degrees of integration with electronic health records (EHRs) and connectivity and interoperability with payers. Such solutions rely on faxes for the bulk of their PA processing.

The second is prospective ePA, which is where the industry is moving. In this transaction, prescribers will prospectively see that PA is required — that is, at the time a prescription is written. The prescriber will also know which questions need to be answered before a 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. With ePA, the need for data entry and processing time are significantly reduced, while accuracy is increased.

Why will doctors start using ePA?
Physician adoption of ePA is expected to take off in the near future.  Why? Because the business case is compelling.

  • ePA saves time. ePA reduces the time spent on each PA request. CoverMyMeds estimates that turnaround time of a PA request has decreased from as many as 3 to 5 business days to within hours, in most cases, and mere moments when the insurer is equipped electronically to accept and process the transaction as well as return a real-time response. This adds up. A recent analysis suggests that doctors spend a whopping 868.4 million hours on manual PA each year, not counting the time devoted by other staff members such as nurses and practice managers.
  • ePA saves money. Surescripts estimates that use of ePA could save $16,000 per year for a 10-doctor cardiology practice that processes 1,680 PAs.
  • ePA is increasingly available in the work flow. About 80% of physicians have an EHR that can be used with ePrescribing. A 2015 survey indicates that 70% of vendors were committed to implementing ePA in their EHRs as of a year ago, and roughly half had gone live with the transaction. We expect to see a huge uptick in those numbers this year when data become available.
  • ePA reduces the hassle factor. As mentioned earlier, manual PA is a pain point for physicians. They view it as a frustrating process that costs a lot of time and money but results in little benefit for patients. Reducing or eliminating this hassle will spur ePA adoption.
  • ePA improves patient care. Improving patient care is an important issue to physicians and ePA offers many advantages over manual PA. For example, ePA reduces gaps in care caused by processing wait times and claims denials associated with manual PA. Perhaps most importantly, the difficulties inherent in trying to obtain PA significantly affect patient care and safety. Nearly 40% of PA requests (roughly 75 million) annually are abandoned due to complex procedures and policies and the hassle factor. Moreover, nearly 70% of patients encountering paper-based PA requests do not receive the medication originally prescribed.
  • More medications require PA. The number of drugs requiring PA is growing exponentially. As a result, physicians will find ePA advantageous in keeping pace with PA prescription volume, which is increasing 20% each year. This is due to the increased availability of very expensive drugs to treat the elderly and chronically ill, whose populations are on the rise. There also are many new specialty medications, including biosimilars, nearly all of which require PA. In fact, specialty medications represent the fastest growing sector in pharmacotherapy. Use of specialty medications is expected to jump by two-thirds in 2015 and account for half of all drug costs by the end of 2016.

We said ‘almost’ what the doctor ordered. ePA has a few shortcomings. First, instead of asking for information that exists in a practice’s EHR system, the current version of ePA includes mostly open-ended questions. The opportunity is to improve physician work flow by providing automated answers to standardizing questions that link, where possible, with data in the EHR.  Most EHRs store and exchange data using the HL7 standard. Improving an EHR’s ability to perform an ePA assist seems to be what physician’s really want. In other words, the EHR should automatically take the patient data the practice has painstakingly documented to fill in the questions for provider review before submission.

How pharmaceutical companies can help
. Here are five steps pharmaceutical companies can take to increase ePA adoption. Companies and their sales forces can:

  • Help educate physicians that ePA exists and explain the particulars about its availability in their EHR.
  • Persuade physicians to use the ePA functionality that is available, even if it is not fully integrated.
  • Urge payers and pharmacy benefit managers to switch to ePA. As of a year ago, 87% of payers were committed to ePA and about two-thirds of them were live with the transaction.
  • Work is beginning on standardizing questions insurers ask. Participate in the development of standardized questions and support their use.
  • Work with states to adopt ePA requirements. State mandates requiring support of EHR-initiated ePA have begun to appear. Wider and consistent regulatory requirements will motivate EHR vendors and payers to hasten their development of ePA functionality to meet these rules. To keep current with the ePA landscape, Point-of-Care Partners offers its ePA State Navigator, which is an up-to-date resource for stakeholders covering ePA-related developments on a state-by-state basis.

Point-of-Care Partners has been part of ePrescribing from the beginning and we are experts in PA and ePA. Give us a call or an e-mail so our team can help your company capitalize on the value of ePA.