Electronic Prior Authorization: What's next?


Ben Stormer

Vice President,
Technical Marketing
Cardinal Health

Jan Nielsen

Division President, Access & Patient Support

In March 2015, CoverMyMeds issued the National Adoption Scorecard for Electronic Prior Authorization (ePA). It summarizes the current state of the ePA industry, aiming to quantify current ePA adoption rates, highlight implementation status by market share leaders, and outline the keys to success for ePA in the industry. Here, two of Cardinal Health’s ePA experts – Jan Nielsen and Ben Stormer – share their perspective on ePA, why it’s needed and what steps need to be taken to implement it more broadly.

Q: What are some of the challenges posted by the traditional prior authorization process?

Jan Nielsen:

While well-intended, the traditional, manual prior authorization process (which typically involves phone calls and faxes between the pharmacy, prescriber and health plan) results in an enormous amount of administrative waste and can lead to high rates of prescription abandonment among patients. For example, as the recently issued ePA Scorecard indicates: Prior authorization cost the health system $728 million in 2012, according to the American Medical Association.

  • Prescribers and their staffs spend an inordinate amount of time on prior authorizations
  • A high percentage of prior authorizations are abandoned due to complex policies and procedures 
  • Despite these problems, the need to manage appropriate utilization of prescription drugs continues to increase, causing the volume of prior authorizations to increase every year.

Q: How can automating the prior authorization help address these challenges?

Ben Stormer: 

By automating the process and connecting all industry participants, electronic prior authorization (ePA) can provide real-time information to support the e-prescribing and prior authorization decision-making process. Once fully implemented, ePA can benefit all players in the healthcare system by dramatically reducing administrative costs and burdens, improving efficiency and ultimately ensuring patients receive the medications they need, faster.

It’s also important to note that ePA will only grow in importance over the coming years, especially as we see an increase in specialty and biosimilar drug launches, which tend to be high-cost and are targeted at niche patient groups. Payers will likely use prior authorization as a tool to ensure these medications are only utilized to treat the right/targeted patient populations. And, because these medications will likely span both the pharma and medical benefit, we’re likely to see an increase in complexity when it comes to payer forms and process requirements.  

Q: If electronic prior authorizations can drive so many benefits for the healthcare system, why is the current prior authorization process usually so manual?

Ben Stormer: 

Inconsistency in payer prior authorization forms and processes presents a challenge for prescribing providers. This creates variability and makes automation more difficult; although we’re hopeful that new technologies will improve automation even when variability exists.

Secondarily, the ability for those in the system to receive electronic transactions varies.  Governing movements such as &quotmeaningful use&quot define standards for e-prescribing and health record portability, but there are currently no enforceable standards for how payers are required to receive ePA transactions. 

Q: What can be done to drive adoption of electronic prior authorization?

Jan Nielsen:

Electronic prior authorization vendors can drive adoption by providing open platforms and aligning on standards for transactions. Generally speaking, I think the recently issued CoverMyMeds scorecard covers several recommendations that can help drive ePA adoption:  

  • Plan compatibility: ePA solutions are likely to see the greatest adoption when they allow prior authorizations to be submitted to any plan, and when the ePA process can become a consistent part of prescriber workflow for handling all prescriptions – not just those for a few payers.
  • Prospective prior authorization: Prospective PA can be completed before a claim rejection occurs in the pharmacy, thereby saving time and patient disruption. To enable this, the prior authorization process must be initiated as part of an e-prescribing workflow process. Implemented properly, and combined with real-time auto-determination from the payer, the prior authorization process begins to look more like decision support for electronic prescribing.
  • Retrospective prior authorization: The majority of PAs still occur after a claim rejection in the pharmacy. Over time, the prior authorization process will move to the point-of-prescribing, but only as formulary data challenges are resolved so that prescribers can adopt the prospective workflow. This process is likely to take many years. In the meantime, ePA vendors need to provide the ability to connect pharmacy-initiated PAs into the prescriber workflow within the EHR system.
  • Financial model: The healthcare industry stands to save billions of dollars when prescribers adopt ePA solutions at scale. Financial models that encourage ubiquity are therefore in everyone’s interest, and a good way to do that is to provide ePA solutions that do not charge prescribers.
  • Open application programming interface (API): APIs refer to a particular set of rules, or code, and specifications that software programs can follow to communicate with each other. They allow different software programs to interface with each other. We believe it’s critical for ePA solutions to be developed with open APIs – to make it easier for technology teams at EHR, payer and pharmacy systems to quickly implement solutions. Documented, standards-based ePA APIs will be a key to driving efficient software implementations in the market.

Automating the process will be critical to expediting patient access to these medications, so they have the highest likelihood of driving optimum patient outcomes.