Prior Authorization is the process that is used to request coverage of a specific medication for a specific patient. Generally, the prescriber requests the authorization from a “Payer” (health plan, processor, or Pharmacy Benefit Manager). The Payer determines whether it will pay for the medication based on a number of factors, such as medical necessity, prior treatment, clinical indications, and total cost of therapy. This process has historically been handled via fax, telephone call, and more recently via payer-specific web portals.
The issue with prior authorizations is that is an antiquated, cumbersome process developed years ago when paper-based processes where the norm. In today’s electronically-driven, real-time response world, prior authorizations are an administrative burden for the provider and patient.
- Prior authorizations costs the industry billions of dollars annually.
- According to National Adoption Scorecard, prescribers and their staff spend more than 20 hours per week on prior authorization requests.
- Surescripts estimates the cost of completing these requests at between $2,000 and $14,000 per physician per year.
- 40% of requests are abandoned because of complex policies and procedures.
These challenges make it critical that the health care industry adopt an electronic health record solution that creates cost and administrative efficiencies and ensures patients are not lost in the prior authorization process. Enter ePA or electronic prior authorizations.
Electronic prior authorization provides real-time data exchange to all participants in the prior authorization decision-making process. In a CoverMyMeds study, results show that the use of ePA significantly reduces the time spent on each prior authorization request, up to 80%, from as many as 15 to 20 minutes to as few as 3 to 5 minutes. Turnaround time of a request is decreased from 3 to 5 business days to within hours in most cases.
Given all the benefits ePA offers, why haven’t we seen a wider spread adoption? To have an effective ePA process it requires wide-spread adoption by EHR vendors, payers and pharmacies leveraging functionality from ePA vendors. It also requires mandates at a state and federal level implementing standardization of the ePA process. The market is moving in the right direction, though. New data from CoverMyMeds and industry partners, indicates progress toward industry-wide adoption of ePA.
- Seventy percent of EHR systems representing the majority of market share are committed to ePA, a 16 percent increase from March 2015
- Eighty-seven percent of payers representing the majority of market share are committed to ePA, a 20 percent increase from March 2015
- Eighty-three percent of pharmacies representing the majority of market share are committed to ePA, a 13 percent increase from March 2015
- Twenty-three states have passed legislation pertaining to prior authorization (PA) and four additional states have pending legislation
As ePA continues to develop it is important for providers to keep it on your radar. If you are currently using an eprescribing solution, make sure it also supports ePA. If you are considering one, make ePA a part of the requirement in vendor selection.