A “BEHIND-THE-SCENES” LOOK AT WHAT’S NEW AND NEXT IN THE WORLD OF PRIOR AUTHORIZATIONS...AND HOW PROVIDERS AND PATIENTS CAN BETTER MANAGE THIS PROCESS.

There is no doubt that prior authorizations are becoming a more important strategy for payers, especially as drug costs rise dramatically because of breakthrough therapies like the latest hepatitis C medications. While powerful new drugs like these can be life-changing for many individuals, health plans want to be certain that the right patients are receiving the right drugs at the right dosage—and at the right time. Specifically, prior authorization strategies are designed to ensure that:

• Drug benefits are administered appropriately
• Patients receive safe, effective therapy that is of the most value to the individual and their medical conditiom
• Waste, error and unnecessary prescription drug use and costs are minimized

PRIOR AUTHORIZATIONS SET TO BECOME MORE COMMONPLACE AND COMPLEX

These requirements are especially common in specialty pharmacy, where the vast majority of therapies require prior authorization approval before insurance benefits are applied. And given that specialty pharmacy is a rapidly growing sector—with spending expected to reach nearly $400 billion by 2020—it makes sense that payers are increasingly focused on this area.

In fact, a recent industry survey asked health plan executives about what steps they are taking right now to control the cost of oncology and specialty pharmaceuticals. The top response (with 48.5% of executives currently using this approach) was prior authorization to label, which is meant to deter off-label prescribing. Prior authorization requirements are also frequently applied against the studies used to gain Food and Drug Administration (FDA) approval (17.8%). It stands to reason that these requirements may only become more rigorous or complex as more powerful—but costly—specialty drugs enter the pipeline.

ADDRESSING PROVIDER AND PATIENT CONCERNS AS WELL AS MISCONCEPTIONS

However, it’s equally clear that prior authorizations can be perceived as a headache for providers and patients alike. A study of primary care practices published in the Journal of the American Board of Family Medicine estimated the mean annual projected cost per full-time equivalent physician for prior authorization activities between $2,161 and $3,430. The study concluded that prior authorization is a measurable burden on physician and staff time.

One of the ways that providers can easily address the administrative burden associated with prior authorizations is by partnering with a specialty pharmacy that can help navigate this process on their behalf. For example, Avella Specialty Pharmacy serves as a single point of contact between payers or pharmacy benefit managers (PBMs) and providers to ensure that the appropriate documentation and paperwork are submitted in a timely manner. Avella’s pharmacists are highly familiar with the unique prior authorization requirements for many different payers and drug therapies, which minimizes administrative hassles that come when providers are unfamiliar with these parameters. 

While prior authorizations can certainly be time-consuming from an administrative standpoint, other concerns about this process from a provider and patient standpoint may be somewhat unfounded. Patients may believe that payers and PBMs simply want to make it more difficult for them to receive a drug, so that they will ultimately give up and request a prescription for a lower-cost therapy. However, the right drugs can help prevent acute events, hospitalizations and other costly healthcare spending. So it’s actually in the best interest of these organizations for patients to receive the most appropriate medication. 

Both providers and patients may also believe that the PBM or payer only wants patients on the lowest-cost drug. Instead, the prior authorization process is ideally designed to find the appropriate therapy first—and then, if there are multiple options available with the same proven efficacy, a lower-cost drug would be made available. 

To understand why these perceptions are often inaccurate, it helps to examine the most frequent reason that prior authorizations are denied. The most common reason PBMs deny prior authorizations is because the patient doesn’t have the specific condition that aligns with FDA indications. This is especially common in oncology, where off-label prescribing happens more frequently. Certainly some patients who are very ill are willing to take greater risks by accepting a drug regimen that is not approved for their specific condition. At the same time, providers are working hard to save the lives of these patients and improve their overall quality of life. However, there are significant risks associated with this type of prescribing, and this is something that payers and PBMs are striving to prevent while also considering the potential for legitimate clinical benefits. 

Subscribe to our blog to stay tuned for part II of our two-part prior authorizations series next week. You can also learn more about Avella's prior authorization services.

The original version of this article was published in the summer 2015 issue of Dispensing Excellence. Download the latest issue to access the full digital copy of the publication and more information on prior authorizations as a critical part of the cost-control strategy.

This article was written by Steven G. Avey, RPh, MS, FAMCP, Vice President, Specialty Programs at MedImpact Healthcare Systems, Inc. Steven Avey is a distinguished expert in managed care pharmacy, quality measurement programs and the improvement of drug assessment processes. He serves as vice president of specialty programs at MedImpact.  Previously, Steven worked for Prospective Health (now Relay Health) establishing its data services division, served as president of managed care at Partners Rx Management, and held a leadership role at RegenceRx. He was also the president and treasurer of the Academy of Managed Care Pharmacy (AMCP) before becoming the executive director of its foundation and is the namesake of its prestigious Steven G. Avey Award. Steven holds a bachelor’s degree and Master of Science degree in pharmacy administration from the University of Utah.