Prior authorizations play a central role in specialty medication treatment for rare diseases. Yet the prior authorization process can also tax payer, patient and provider resources — and patience.
Specialty medications continue to grow. In the next five years, specialty pharmaceuticals are expected to make up 47 percent of the pharmaceutical industry’s total revenue, write Jason Eldred and Brian Corvino, managing directors at Deloitte. A more efficient, data-driven approach to managing prior authorizations is a must.
Prior Authorization: A Universal Obstacle
Prior authorization aims to achieve two goals: Ensuring quality of care while also controlling healthcare costs. Reaching these aims comes at a price.
“Administrative prior authorization processes have been estimated to contribute as much as $25 billion annually to the cost of healthcare in the United States,” according to a 2019 CAQH report. A large portion of this spending comes from payers’ pockets as they hire specialists and add infrastructure to manage prior authorization demands.
Prior authorization requirements pose challenges for patients and providers as well. A 2020 CoverMyMeds survey estimates that seven percent of all prescription claims are rejected for failing to meet prior authorization requirements. Thirty-seven percent of prescriptions that require a prior authorization are abandoned by patients.
Even when prior authorizations are completed, the process poses challenges. The same survey team spoke to 500 patients, 60 percent of whom had difficulty obtaining their first dose of a specialty medication. About ten percent said they waited eight weeks or longer to receive their first dose.
When patients struggle to navigate prior authorization requirements, distributors and payers pay the price. As many as 150 million patients may forego their medication rather than deal with the authorization process, according to the CoverMyMeds report.
“Specialty medication costs accounted for over 50% of the total pharmacy spend incurred in 2020,” says Bryan Statham, vice chair of the board at RxBenefits. An RxBenefits survey found that working-age U.S. residents actively seek jobs with healthcare coverage that includes specialty medications. When the prior authorization burden is too high and patients forgo their medications, they incur higher healthcare costs down the line and imperil their ability to stay employed and contribute to their healthcare plans.
Challenges and Tools for Prior Authorizations
Prior authorizations originally focused on “brand new drugs with very high price tags where the evidence was still accumulating,” says dermatologist and AMA president Jack Resneck. Medications for rare diseases frequently fell in this category. Today, however, prior authorizations may cover nearly any drug, including generics that have been commercially available and widely used for decades.
Managing the volume of prior authorization demands falls on both providers and payers. For payers, the challenges include not only responding to prior authorizations, but also gathering data and implementing insights for better efficiency. Alan Lotvin, executive vice president at CVS Health, lists several challenges to prior authorization management, including:
- Changing market dynamics including increased utilization and price inflation.
- The use of medical versus pharmacy benefits to cover specialty drugs making data on specialty drug use difficult to track.
- More complex claims processing under medical benefits, leading to more time, money and effort spent by payers on these claims.
“It is more important than ever that payors have the right strategies in place to comprehensively manage specialty spend,” writes Lotvin. But for some payers, the hurdles are higher than ever as well.
Better data collection remains a challenge for payers. Communication remains challenging as well — frustrating providers and patients as well as payers.
“The process through which prior authorization is obtained involves coordination across multiple communication channels,” write Christine A. Sinsky and fellow authors in a 2016 AMA report. Respondents said they spent fifteen minutes to two hours on the phone to obtain each prior authorization.
Providers report a number of challenges in gathering information from payers, understanding it and communicating it to patients. Kathy Lewis and Pooja Babbrah note that:
- 42 percent of providers say that obtaining a prior authorization is a “significant challenge.”
- 53 percent say access to prior authorization requirement info is “extremely” or “very” important when deciding what to prescribe.
- 20 percent of providers say that despite its importance, information about prior authorization requirements is not available to them electronically.
- 23 percent have access to electronic prior authorizations in their electronic health records (EHRs) and 21 percent have access to a portal-based tool, although 48 percent rank these options as the first or second most beneficial tools for understanding payer’s involvement in their patients’ prescription drug treatments.
Payers have one additional problem: Even when providers can access information about prior authorizations, they may view it skeptically. Nearly one-quarter, or 24 percent, of respondents say they don’t find information on prior authorization requirements trustworthy, write Lewis and Babbrah.
Practices that transitioned to digital platforms to manage prior authorizations reported less frustration to Sinsky and fellow authors. Not all medical providers have access to EHRs that allow for prior authorization management — and even fewer have the necessary digital tools to connect payers, patients, pharmacies and distributors in one place.
How the Hub Facilitates Payers’ Efforts in Prior Authorization
“Given that prior authorization is the costliest and most time consuming transaction to conduct manually, a growing number of public and private sector initiatives are focused on reducing overall administrative burden associated with prior authorization,” notes a 2019 CAQH report detailing administrative costs in the medical industry.
An AMA survey indicates that physicians support using automation and electronic platforms to streamline the prior authorization process — even when they don’t currently have access to these tools. Only 26 percent of respondents said their current EHR system allows them to handle prior authorizations for prescription medications electronically.
The Hub fills both a gap in current communications and a demand for better processes in prior authorization management.
Hub participation also benefits payers by allowing them to build stronger relationships with specialty pharmacies and the patients they serve. Cost-conscious payers who partner with specialty pharmacies benefit in several ways, writes physician Nancy Mendelsohn in the Pharmacy Times. These include:
- Better utilization and management controls as specialty pharmacies work with patients on medication compliance.
- Access to deeper, more accurate data through specialty pharmacy reporting.
- Consistency in patient care leading to lower cost burdens.
- Improved patient outcomes leading to long-term cost savings and better results.
Specialty pharmacies play a key role in navigating prior authorizations and helping patients find financial assistance, write Megan E. Peter and fellow authors in a 2022 PLoS One article. Many physicians and their staff do the same work for patients.
Hub access allows payers to communicate more easily with physicians, patients and pharmacies by placing all those communications in the same spot. It builds trust with physicians and pharmacies by making prior authorization information easy to access and navigate.
Additionally, Hub access allows payers to analyze new methods of improving patient outcomes while managing costs. One such option is to combine utilization management with supportive care management, says Erin Ventura, who manages the specialty clinical programs at Magellan Health. Better coordination of utilization and supportive care depends in part on improving the prior authorization process — which a tool like the Hub can do.
The Hub also gives payers an opportunity to collect relevant data about the prior authorization process, leading to greater efficiency for payers, providers and patients. Payers can thus manage costs without sacrificing provider trust or patient outcomes.
Prior authorizations consume payers’ time and energy, and they fill patients and physicians with dread. The right digital platform can streamline the process, provide access to richer data and strengthen relationships to boost patient outcomes.
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