December 1, 2014

Maria Barhams

A Case for Electronic Prior Authorization

The following might sound like a joke but the scenario isn’t funny: A patient walks into a pharmacy to pick up her prescription, and heads to the counter to get her prescription filled only to learn that the drug requires prior authorization from her insurance company.
The patient, frustrated, calls back the physician’s office to find out what’s going on. The patient’s treatment is now delayed. The physician’s office then has to manually process the patient’s prior authorization or choose an alternative treatment that will be covered. Even if the prior authorization process goes smoothly, it may take two days for the patient to receive their script.
The Current Prior Authorization Model
Altogether, the whole process impacts many parties including, most closely, the pharmacy staff and the provider. Here’s how the current prior authorization process impacts stakeholders:

Patients Delays in treatment, low satisfaction, limited knowledge of process
Pharmacy High call volumes, high costs of restocking meds
Providers Time spent processing prior authorization
TPAs (PBMs) and Health Plans Money spent to process/review each prior authorization transaction
Pharma Increased prescription abandonment, extensive physician and patient administrative assistance

The manual prior authorization process places the burden primarily on providers and pharmacy staff to initiate and manage the medical review on behalf of the patient. The process requires that healthcare providers and pharmacy staff locate the acceptable forms based on the patient’s eligibility, complete the forms based on the data in their e-prescribing/Electronic Medical Record (EMR)/Health Information System (HIS) solution, and submit the forms to the corresponding payer or Pharmacy Benefit Manager (PBM), typically via fax. In fact, the process is time-consuming and frustrating for many prescribers:

  • Physicians spend up to $10,0001 per year manually processing prior authorizations
  • 91 percent2 of physicians are frustrated with prior authorization
  • Two-thirds of patients wait two days3 to receive their script
  • Processing prior authorizations takes five to eight hours1 per week, per physician; over 20 hours3 of clinical and clerical time4

Engineering Healthcare Progress
Having authorization before the patient leaves the physicians office, or at least before the patient arrives at the pharmacy, is the first step in supporting medication adherence. The current procress does not ensure the patient will receive approval on their medications, and can break the first “chain” in patient medication adherence.
As an improvement to the manual prior authorization process, payers and PBMs have created portal solutions, which allow healthcare providers and pharmacy staff to transmit prior authorizations digitally. These portals act as form repositories and as a means for submitting and tracking prior authorizations. However, this process stops short of reducing the administrative burden on healthcare providers and pharmacy staff.
Electronic Prior Authorization Legislation
At the same time that the healthcare technology industry is making a move toward ePA, states are beginning to recognize its benefits. Below is a map of the states that have ePA mandates:

  • Eight states have mandates for ePA
  • Numerous states have drafted laws, several are planning ePA mandates

The Case for ePA
The case for ePA is evident. ePA is one of the most significant areas of progress within the healthcare industry, as it addresses one of the most stressful, time consuming and inefficient processes that providers face. Overall, based on commentary and data about the manual prior authorization process, the technology is a welcome improvement upon the current process. And that’s no joke.

1Health Affairs, Vol. 28 No 4, August 2009, What does it Cost Physician Practices to Interact with Health Plans, L. Casalino, et al
2Surecripts Survey
3American Medical Association (AMA) Survey, Nov. 2010, Preauthorization Policies Impact Patient Care
4Health Affairs, Vol. 28 No 4, August 2009, What does it Cost Physician Practices to Interact with Health Plans, L. Casalino, et al

About Maria Barhams

Ms. Barhams joined DrFirst in 2014 as the director of population health after beginning her career at the National Institutes of Health (NIH) as a fellow in 2007. In her public service capacity, she leveraged her background in biology and public health/health services administration in various analyst, administrative, intramural, and extramural functions across the NIH. Most notably, Ms. Barhams supported the revision of clinical guidelines and risk stratification of a rare disease affecting patients with compromised immune systems. These guidelines were later adopted and published by the American Academy of Neurology. Ms. Barhams is passionate about public health and the rapid diffusion of evidence from research into real-world clinical settings to improve patient outcomes and reduce disparities. In her capacity at DrFirst, she supports the realization of this vision via DrFirst's technology solution, Patient Advisor.