How Health IT Can Help Payers Address Prior Authorization Reform, Advance Electronic Prior Authorization

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By Jocelyn Keegan

Prior authorization (PA) for medications, devices and therapies is viewed as a valuable utilization management tool by payers but a long-standing pain point for providers and pharmacists. Led by the American Medical Association, a 17-member coalition — including  the American Hospital Association and groups representing providers and pharmacists — recently drafted a framework for prior authorization reform based on 21 Principles. The coalition hopes the Principles will be adopted by insurance companies, pharmacy benefit managers (PBMs), those involved in utilization review and accrediting bodies.

The 21 Principles on the surface may appear to be daunting to many payers and pharmacy benefit management companies (PBMs). However, they can leverage existing health information technology (health IT) to streamline and improve PA processes to bring them in line with the coalition’s suggestions.

Opportunities for Payers and PBMs

Most of the 21 Principles address specific coverage and process issues.  However, the use of health IT can be leveraged both implicitly and explicitly to facilitate several of the Principles. Here are five examples.

  1. Payers and PBMs can continue critical upgrades to their health IT systems to automate PA. The achievement of this goal will ensure their systems accept transactions using the electronic prior authorization (ePA) standard from the National Council for Prescription Drug Programs (NCPDP), as described in Principle #12. NCPDP’s ePA standard enables up-front prior authorization during electronic prescribing from an EHR. The industry has made significant progress and investment over the past several years to implement the first generation of ePA processing. Recent progress by vendors such as CoverMyMeds and Surescripts pushes payers to fully leverage the automation possible with the ePA transaction set. Continued adoption of ePA-based transactions on the provider side will drive more payers and PBMs to make richer return on these investments.
  2. Payers should address the accuracy and completeness of formulary data head on, as described in Principle #9. Providers are not confident that they can rely solely on formulary information available to prescribers in the electronic health record (EHR) to understand prior authorization requirements. This continues a frustrating cycle of sending a prescription off to pharmacy and waiting for a rejection to initiate a “retrospective” process. Payers and supporting vendors must make it a priority to ensure that complete coverage of restriction data are included in the formulary files provided to EHR vendors.
  3. Payers should consider making sure that their coverage restrictions and supporting documentation requirements are both transparent and consistent, as described in Principle #8. They can work with EHR vendors to ensure that coverage restrictions are displayed – and displayed accurately — in EHR offerings and documentation requirements are clearly stated. Updates also should be made available to vendors and incorporated on a timely basis in EHRs.
  4. Payers can leverage ePA to reduce burden and improve accuracy, which is a theme throughout the 21 Principles. For example, payers can improve accuracy and efficiency by asking better, standardized and more specific questions, which can be built into the ePA process. This was alluded to in Principle #18. The same benefits apply to prepopulating patient data in ePA forms. Such changes additionally can help payers and PBMs reap the benefits of their investment by reducing overhead and improving risk management.
  5. Payers and PBMs should support the migration of specialty workflows for prescribing and dispensing to NCPDP standards. Specialty medications generally are expensive and almost always require prior authorization. Yet, specialty pharmacies are still mired in the antiquated paper-phone-fax processes for PA. Known limitations to workflows required for the ASC X12 278 are holding automation work back for all but drugs covered under the pharmacy benefit. Leveraging today’s ePrescribing systems can help improve turnaround time and accuracy of PA approvals and denials, as described in Principle #12.

Going Forward.  Some readers of the 21 Principles may find parts incendiary, particularly those with perspectives that are different from the AMA and coalition. We view it as renewing a constructive dialog for figuring out how to balance patients’ needs for quick access to appropriate therapies and the needs of payers and PBMs to control costs and utilization. We applaud the work of the AMA and the coalition for getting the conversation restarted. We also acknowledge the work and foresight of NCPDP and others, which supports the infrastructure needed to make PA a totally electronic process.

So what’s next? Point of Care Partners understands the workflows and pain points involved in switching to ePA — both as national experts in the issue as well as conveners of the NCPDP task group on ePA. We suggest formation of a cross-functional group to come together as an industry to discuss challenges and opportunities. Together, we can make ePA an even better tool to get the right drug to the right patient at the right time at the right price.

Jocelyn Keegan

Jocelyn Keegan

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