Modifying workflows and embracing automation help practices, patients

Prior authorization, one of the many onerous administrative processes required in today’s healthcare environment, is perhaps the most frustrating for physician practices and patients alike as it requires countless hours of staff time and can delay or deny patient treatment.

It’s also costly. The prior authorization burden rings in at an estimated $23 to $31 billion price tag each year.¹ 

Despite recent advancements in electronic prior authorization, practices must typically still obtain prior authorization through phone, fax, health plan Web portal or even the postal service. Adding to the burden is the fact that health plans are increasing their prior authorization requirements, according to MGMA members, who report that some plans are requiring them for generic drugs.

A recent MGMA Member Community discussion outlines some of the concerns as professionals see an in-crease in required prior authorizations.“We have seen an increase here with the insurance companies now offering closed network plans, tiered plans, etc., that require referrals from PCPs [primary care providers] and more services like infusions are requiring pre-authorizations, especially for newer medications,” says Denise Andrade, MBA, FACMPE, administrator, Neurology Foundation, Providence, R.I. 

Cost

Prior authorization is used by health plans for certain health benefits and services as a cost containment strategy, due to increased healthcare expenditures, according to the insurance com-panies. Typically, prior authorization programs establish that a health plan’s medical necessity guidelines are met for a service that is requested by a provider based on a patient’s diagnosis and history, and that services are being provided in the most cost-effective manner as defined by the health plan. The process often includes a review of the treatment plan and service requested to deter-mine a patient’s eligibility; place, date and type of service; and the CPT code. The process has proven to be highly complex because criteria, policies and processes vary significantly among health and pharmacy benefits. 

Health plans have a vast array of prior authorization programs aimed at virtually every type of medical service. Yet, while prior authorization requirements vary among health plans, pharmacy benefits and radiology and advanced imaging rep-resent clear and significant administrative burdens for practices. 

Medications and prior authorizations

The current medication prior authorization process is an unwieldy exchange of information that can cause delays in treatment and significant dissatisfaction for practices and patients. Prior authorization is also challenging for the treatment process as clinicians who might not know that a prior authorization is required until a prescription is rejected at a pharmacy. This results in a missed opportunity to discuss and prescribe therapeutic alternatives during patient encounters and might cause delays in treatment. In addition, pharmacists might tell patients that a prior authorization was needed. Patients must then wait for the pharmacy to contact the practice and wait for prior authorization or pay full price for the prescription.

Pharmacy benefit managers (PBMs) provide administrative services in the processing and analysis of prescription claims for pharmacy benefit and coverage programs offered by health plans. Health plans have also created radiology benefits manager (RBM) positions to handle prior authorization of clinician-ordered diagnostic imaging services. The challenges to practices posed by RBMs are similar to PBMs: significant health plan variation in prior authorization pro-gram policies, requirements and criteria. 

Health plans have implemented cost containment programs that require prior authorization of certain medications on formulary preferred drug lists. Typically, formularies are composed of five tiers (from generics to nonpreferred brands). Many patients experience medication quantity limitations and step-therapy (patients fail first on a less expensive medicine approach) requirements imposed by a pharmacy benefits plan. The following is an example of quantity limits:

• Dose efficiency edits (limits coverage of prescriptions to one dose per day for drugs that are approved for once-daily dosing)
• Maximum daily dose (an informational message is sent to the pharmacy if a prescription falls outside recommended minimum and maximum doses)
• Quantity limits over time 

To meet these PBM requirements, clinicians must verify a patient’s insurance benefits and know what to do when the drug they prescribed requires prior authorization. 

The wide variety of formulary configurations results in a time-consuming process for practices. In fact, pharmacy-related administrative processes (such as prior authorization, pharmacy call-backs, etc.) cost an average 10-physician practice approximately $137,000 per year, according to a 2004 MGMA survey. Most often clinicians are not reimbursed for time spent on these activities.

To make an appropriate therapeutic decision (while considering cost to a patient), clinicians must review a patient’s medical records and determine whether to authorize an alternative therapeutic option change, communicate this immediately with the patient or discuss options during the next office visit. 

“We have seen an increase here with the insurance companies now offering closed network plans, tiered plans, etc., that require referrals from PCPs [primary care providers] and more services like infusions are requiring pre-authorizations, especially for newer medications.”
– Denise Andrade, MBA, FACMPE, MGMA member

Automating workflow 

Prior authorization continues to be a manual process for most practices though there is more automation in administrative workflows. There are some significant benefits to moving to an electronic prior authorization process if this functionality is available through your practice management system software, including:

• Practices can leverage standardized insurance eligibility and prescription formulary information that allows clinicians to be notified of any prior authorization requirements before sending prescriptions to pharmacies and allows them to identify approved therapeutic alternatives preferably before patients leave the office. 
• Electronic prior authorization can also be linked to the medication reconciliation process, which can help reduce medication errors that are common among patients who use multiple pharmacies and have co-morbidity factors and multiple healthcare providers.
• Electronic prescriptions that are pre-approved by a health plan can be routed directly to a pharmacy, decreasing the chance that medication will be blocked at a pharmacy.
• Prior authorization forms for all medical services can be pre-populated with a patient’s information to save staff time. 

Several technology companies are offering web-based solutions that add electronic prior authorization to a practice’s e-prescribing workflow. This approach permits practice staff to request electronic approval from a PBM, and some members have received electronic responses within minutes while a patient is still in the practice. This approach can reduce administrative ef-fort while increasing patient satisfaction.

On the medical services side, a HIPAA-mandated standard (X12 278) for electronic prior authorization was developed several years ago though it has not been widely implemented. This is due, in part, to the fact that health plans typically require a manual review of the health record prior to making a determination.

The industry is still developing a real-time pharmacy benefit inquiry transaction, and EHR formulary data lacks quality and completeness, which makes it harder for clinicians to determine prior authorization requirements when prescribing medications. From an advocacy perspective, MGMA continues to push for a standard real-time pharmacy benefit inquiry and response trans-action to support provision of prior authorization requirements and the real-time availability of other important formulary data directly at the point of prescribing.

While practices would like to see volume for prior authorizations decrease, the number appears to increasing as health plans use this administrative process to try to reduce their costs. However, there is significant movement toward automating this burdensome task through new standards and technology. As more health plans offer electronic prior authorization solutions, MGMA members should be poised to take full advantage of these cost-saving opportunities by assessing operations and implementing suggestions outlined in the box below.

Note:

1.    Casalino LP, Nicholson S, Gans DN, et al. “What does it cost physician practices to interact with health insurance plans?” Health Affairs (Millwood). 2009;28:w533–43.

Increase in prior authorizations add to admin burden MGMAStat poll results

Data from 3/29/2016 poll.

15 tips for streamlining prior authorization

1. Chart health plan prior authorization requests, identify plan patterns and develop a list of pre-approved medications for each of your major plans to reduce requests and save staff time. Knowing the likelihood of a prior authorization request will help staff compile necessary information and save clinician time.
2. Chart a health plan’s prior authorization request and denial rates. If you identify a pattern of overuse raise the issue during contract negotiations and discuss with plan representatives.
3. Check to see if any of your health plans offer prior authorization waivers for clinicians who meet certain benchmarks.
4. Attempt to identify and address all prior authorization requirements before submitting prescriptions to reduce calls from pharmacies.
5. In larger practices, assign prior authorization duties to designated staff. Staff expertise in this area will improve efficiency.
6. For situations such as workers’ compensation, assume that a prior authorization will be required for each service.
7. When a prior authorization is expected, ensure that a clinician progress note includes a clear explanation for why a particular therapeutic option is warranted. This should speed the plan review process.
8. Assign staff to monitor prior authorization approval and quickly contact health plans if a request seems to be delayed or lost.
9. Develop a process to deal with denied authorizations that includes a well-constructed appeal that contains necessary and supporting documentation.
10. Ask your EHR vendor if your software has the capability of auto-populating prior authorization request forms to save significant staff time preparing a request.
11. Conduct a return-on-investment (ROI) assessment on your low-volume health plans that have high prior authorization requirements. It might be cheaper to drop these plans.
12. Try to leverage a health plan’s web portal instead of opting for phone or fax plan interaction while conducting a prior authorization.
13. Talk to your practice management system and EHR vendors to discuss electronic prior authorization options.
14. If an electronic prior authorization option is available from your vendor, conduct an ROI calculation that factors in staff time for manual approaches and increased patient satisfaction levels.
15. Test implementation of electronic prior authorization with pharmacies first, then move to other medical services.