Pharmacy Prior Authorization: Challenges and Solutions
Date Posted: Thursday,
March 12, 2020
The prior authorization (PA) process can cost pharmacies and physicians' practices a lot in terms of time and money. A December 2018 survey by the American Medical Association revealed that, despite efforts to reduce administrative burdens and provide timely care, Prior Authorizations continue to pose significant challenges for both physicians as well as patients. Up to 88 percent of the 1000 practicing physicians surveyed reported that the number of prior authorizations required for prescription medications had increased over the last five years, with half of the respondents saying they had increased significantly.
Obtaining a prior authorization is a very time-consuming process for physicians and their staff. In an AMA survey, nearly 65 percent of physicians report waiting at least one business day for prior authorization decisions from insurers-and 26 percent said they wait three business days or longer. More than 91 percent said that the PA process delays patient access to necessary care; and 75 percent reported that PA can sometimes lead to patients abandoning a recommended course of treatment. Further delays occur if coverage is denied and must be appealed.
Why Health Plans Require Prior Authorizations
Obtaining a prior authorization is a requirement that insurance plans place on healthcare providers to obtain an advance approval before a specific procedure, service, device, supply, or medication qualifies for payment coverage.
Physicians typically aim to prescribe the best drug for the patient, and this may mean specifying a brand name medication rather than a generic one. The main purpose of the PA process is to control the use of or prevent the overuse of non-preferred brand name or non-formulary medications. Health plans use the PA as a means to ensure that the drug prescribed is truly medically necessary appropriate, as well as economical for the patient's situation.
For example, if the physician prescribes an expensive drug, the insurance company may authorize it only if the physician can show that it is a better option than a less expensive medication for the condition.
The criteria for approval of a drug undergoing the PA process may include:
- The diagnosis codes along with pertinent lab/test values and documentation
- Failure of therapy with certain drugs that are indicated to treat the same disease as the medication requiring the Prior Authorization
- Patient demographics, such as age or gender
- The patient's state or stage of a disease
- Prescriber limits whereas only specific medical specialties are permitted to prescribe certain medications
Medications that Require Prior Approval
According to Consumer Affairs, the following kinds of drugs are subject to requiring a PA:
- Brand name medications that are available in a generic form
- Expensive medications, such as those needed for psoriasis or rheumatoid arthritis
- Drugs used for cosmetic reasons
- Drugs prescribed to treat a non-life threatening medical condition
- Drugs not usually covered by the insurance company, but said to be medically necessary by the prescriber
- Drugs usually covered by the insurance company, but prescribed at doses higher than normal
One of the most recognized names in health insurance, Blue Cross Blue Shield, requires prior authorizations for the following:
- Drugs that have dangerous side effects
- Drugs that are harmful when combined with other drugs
- Drugs that should only be prescribed for certain health conditions
- Drugs that are often misused or abused or are prescribed when less expensive drugs might work better
PA Process and Barriers to Medication Access
The chain of events to obtain a prior authorization starts with the physician prescribing a specific drug. The patient then presents the prescription to the pharmacist. If the medication requires a PA, the pharmacy will contact the physician who prescribed the medication and inform them. At this stage, the patient can either opt to wait for coverage approval from the insurance company or pay for full cost of the prescription themselves. If the patient decides to wait, the physician will contact the insurance company and submit a formal authorization request according to the plan's guidelines, along with the necessary forms. The insurance company may also require the patient to complete some paperwork or sign some forms. The insurance company will then review the request and may either authorize the drug or refuse to cover it.
The common reasons why a patient's PA request may not be approved are:
- The patient did not give the insurance company, physician, and pharmacy enough time to complete the needed steps (this can take several business days).
- The insurance information was outdated, or the claim was sent to the wrong insurance company.
- The medication was not medically necessary.
- The supporting evidence was inadequate.
- The physician's practice did not contact the insurance company.
- The wrong PA code was used to bill the medication.
- Payer rules changed.
- The physician did not meet payer guidelines.
Sometimes, the approval of the drug is only valid for a limited time, such as one year or one month. In such cases, the authorization process would need to be restarted.
Summing up the PA problem, AMA President Barbara L. McAneny, MD, said, "Physicians must follow insurance protocols for prior authorization that require faxing recurring paperwork, multiple phone calls, and hours spent on hold. At the same time, patients' lives can hang in the balance until the health plan decides if the treatment will qualify for insurance coverage."
Appealing Rejected Claims
If patients believe that their pharmacy PA was incorrectly denied, they can appeal the rejected claim. They would need to first contact the insurance company and ask why the claim was denied. If the insurance company indicates a billing error or missing information, patients can work with their physician to review the paperwork and fix any errors that caused the denial. They can also ask the physician to provide backup evidence or notes that could help prove that the prescription is medically necessary. The chances of success in resolving a prior authorization denial are higher when the physician ensures that all clinical information is included with the appeal, including any data that may have been missing from the initial request.
Insurance Authorization Services to Ease Pharmacy PA
If the healthcare practitioner knows in advance that the drug requires PA, the necessary paperwork to have the drug approved for the patient can be completed before the patient approaches the pharmacy. Problems arise when the patient and physician are unaware of which drugs on the health plan's formulary require PA. Outsourcing the insurance authorization task can address this concern.
How do insurance authorization services work? Insurance authorization companies have experienced personnel who act as a liaison between the physician's practice and the payer. These experts have extensive experience in working with all government and private insurances. They will collect the patient information from the practice and check the PA requirements before services are provided or prescriptions are sent to the pharmacy.
Insurance authorization services cover the following:
- Verifying patients' benefit information before the office visit to ensure clean claim submission
- Contacting payers to obtain pre-authorization quickly
- Ensuring that payer criteria are met before submitting the request
- Submitting all necessary documentation with PA requests
- Tracking requests and managing follow-up, such as getting more information from the physician, for the pre-authorization
- Support for appealing denials
Led by the AMA, physicians, payers, and other stakeholders are working to improve the PA process. With proper documentation and the support of an insurance verification and authorization staff, practices can reduce PA hassles and enhance patient care.
Natalie Tornese, CPC, Director Of RCM. Natalie is Director Of RCM, responsible for Practice and Revenue Cycle Management at MOS. She brings 25 years of healthcare management experience to the company. Natalie has worked in varied leadership roles with practices and specialties. Her primary focus is revenue cycle management with an emphasis on Medical Billing, Coding and Insurance Verification Management. www.outsourcestrategies.com