April 2014, Vol 2, No 2 - Inside Pharmacy Management
Julie Hessick, RPh

Retail pharmacies are faced with juggling patient care and the burden of administrative responsibilities associated with dispensing medications. One of these responsibilities is related to the prior authorization process, which can be troublesome. Prior authorization can delay the patient from receiving their medication and result in inadequate control of disease.1 Most patients, and their physicians, do not realize the prescribed medication is not covered and requires a prior authorization until the pharmacy receives a claim rejection. Recent innovations are moving healthcare toward electronic prior authorizations (ePAs), which can significantly improve patient care and efficiencies in the pharmacy.2

Why Do Health Plans Use Prior Authorization Programs?
Several health plans implement prior authorizations to help contain pharmaceutical costs and ensure the safety of their patients.3 For example a health plan may require a medical review before approving the medication, or they may require a trial and failure of a preferred, more cost-effective medication before approval of a second-line or nonpreferred agent.3 They may also request a prior authorization to confirm a particular medication is prescribed according to US Food and Drug Administration indications, and within evidence-based clinical guidelines.3

Additional examples of common reasons health plans require prior authorizations include3:

  • High-cost and specialty medications
  • Brand name medications with generic equivalents
  • Lifestyle medications (eg, weight loss, cosmetic, erectile dysfunction)
  • Quantity limits based on duration of therapy or maximum dosages.

What Is the Impact on the Pharmacy and the Patient?
An estimated 110 million prescriptions are abandoned at US pharmacies annually.4 This contributes to significant revenue loss for the entire realm of pharmacies, including chain, independent, and specialty pharmacies.

On the other side of the counter—of the 110 million prescriptions abandoned—over half of the patients do not fill an alternate prescription.4 Interrupting or delaying the start of a patient’s medication can decrease adherence and lead to therapeutic abandonment. This, in turn, has a negative impact on a patient’s overall health, including uncontrolled vitals, disease progression, abnormal laboratory values, and poor therapeutic outcomes.

How Does ePA Improve the Process?
In the past, the only means for a physician to start a prior authorization was to contact the health plan and request the authorization by phone or fax.2 Recently, the National Council for Prescription Drug Programs (NCPDP) adopted a new ePA standard to make the prior authorization process more efficient.5 The NCPDP is a trade association responsible for the development and implementation of pharmacy transaction standards.6 They have set the industry standards that govern the electronic adjudication of prescription drug claims, which helps streamline the prior authorization workflow, and is comparable to the electronic prescribing standard that prescribers use.6 The ePA standard provides real-time prior authorization submission, review, and approval, allowing healthcare providers to submit prior authorization requests in a much faster, simpler way.5

The Figure illustrates the workflow of the ePA process. A physician or pharmacy can initiate the prior authorization prospectively at the point of care, or retrospectively, after the claim rejects. The NCPDP standard is a 4-part transaction that occurs between the physician and the plan, and can involve the pharmacy.7 After the required information for the prior authorization request is received and reviewed by the plan, an outcome can be transmitted back to the physician and pharmacy.5 This real-time submission will increase the pharmacy efficiencies, and improve the ability of a patient to quickly receive their medication and begin therapy.5

What Does ePA Mean to the Pharmacy?
There are several ways a pharmacy can start an ePA and send it to the prescriber for completion. These include websites, the pharmacy’s claims adjudication provider, or pharmacy software vendor.2 These processes are built into the pharmacy’s workflow and do not require submission by phone or fax.2 Electronic methods give the pharmacy direct access to a real-time response once the ePA is submitted by the prescriber and the outcome is finalized.2 Allowing patients to get the medication they need and when they need it can prevent prescription abandonment, increase patient adherence, and improve therapeutic outcomes for the patient.

The pharmacy and the physician office will gain efficiencies when using ePAs, ultimately benefiting patients by getting them on their prescribed medication faster and not disrupting the pharmacy’s workflow.

References

  1. State Pain Policy Advocacy Program. Standardization of prior authorization process for medical services white paper. http://sppan.aapainmanage.org/assets/standardization-prior-auth-whitepaper.pdf. Accessed April 17, 2014.
  2. American Medical Association. Electronic prior authorization toolkit. www.ama-assn.org/ama/pub/advocacy/topics/administrative-simplification-initiatives/electronic-transactions-toolkit/prior-authorization.page? Accessed April 17, 2014.
  3. Academy of Managed Care Pharmacy. What is prior authorization and why is it an essential managed care tool? www.amcp.org/prior_authorization/. Accessed April 17, 2014.
  4. Shrank WH, Choudhry NK, Fischer MA, et al. The epidemiology of prescriptions abandoned at the pharmacy. Ann Intern Med. 2010;153:633-640.
  5. National Council for Prescription Drug Programs. NCPDP announces availability of standardized transactions for ePA in SCRIPT standard. Press release. July 22, 2013. www.ncpdp.org/NCPDP/media/pdf/pressrelease/072213_NCPDP_ePA_FINAL.pdf. Accessed April 17, 2014.
  6. National Council for Prescription Drug Programs. Frequently asked questions. www.ncpdp.org/About-Us/FAQ. Accessed March 9, 2014.
  7. National Council for Prescription Drug Programs. SCRIPT electronic prior authorization transactions overview. www.ncpdp.org/NCPDP/media/pdf/NCPDP_SCRIPT_ePA_Standard.pdf. Accessed April 17, 2014.
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Last modified: May 21, 2015
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