1. FEBRUARY 2016 • FIRST REPORT Managed Care WWW.FIRSTREPORTNOW.COM
FEATURE
Prior authorizations pose an administrative burden
for managed care organizations, physicians’ offices,
and patients. They can also delay needed care. First
Report Managed Care asked an expert panel of clini-
cians and other authorities about the challenges, as
well as best practices to help minimize the headaches.
CHALLENGES AND BEST PRACTICES
The burden of the administrative process
is clear, but how do you stop that from
affecting quality of care?
By Dean Celia
FRMC: It seems the biggest challenge with
prior authorizations (PAs) is the administrative
burden. Would you agree?
Smith: Definitely. There’s a 10-point scale for the
degreeof“onerousness”ofaPA.Theleastonerousisa
“1,” where a patient must have tried a generic within a
periodbeforeabrandcanbeapproved.Thisiscommon
with statins. In the middle of the scale, a patient must
havecertainstudiesdonebeforeadrugisapproved.For
example,apatientwithosteoporosiswillneedtogeta
bone density test done before a biologic is approved.
Plus, they may also have to try a bisphosphonate first.
A “10” means multiple tests must be conducted and
read. Then a written justification must be sent to the
plan. Some endocrine drugs fall into this category.
DrCooke:Forme,thebiggestchallengeisthathealth
and quality of care may be affected. The administra-
tive process incurs a lot of time, affecting health care
provider workflow, as well as MCO [managed care
organizations] resources.
DeKoven: Yes, they are a burden, and recent litera-
ture indicates that oftentimes PAs and the associated
cost/burden may not even be necessary, since such
a large proportion of the inquiries are allowed or not
re-directed.
Dr White: PA is a key component in managing the
healthcarecostsofapopulation.Westrivetomakethe
process as efficient as possible. Our PAs and appeals
are generally turned around in less than 24 hours.
Dr Watkins: The challenge for us is to reduce ad-
ministrative burden for providers and ourselves. As
my executive VP likes to say, the best UM [utilization
management] is no UM at all, because providers are
ideally already doing the right thing. But that doesn’t
always happen. Sometimes when a patient sees their
doctor, they get care that they don’t need; other times,
they don’t get care they really do need. Both of these
concern us, and we want our providers to do the
right thing, even when it may cost more in the short
run. Members are also impacted, and good member
communication is critical if they are to have a good
member experience.
Dr Cooke: There are important unanswered ques-
tions. How much time is spent on the process? How
muchmoneyissaved?Mostimportantly,howispatient
care affected? It is difficult to quantify these aspects.
Researchontheimpactofformularyrestrictionsshow
savingsonthepharmacybudget,butmedicalcostsmay
go up. On the other hand, PAs have value in that they
may prevent wasteful use of therapies and decrease
risk of toxicity, which can have a positive impact on
medical costs as well as pharmacy costs. The balance
of ensuring appropriateness and quality is difficult to
implement and to measure.
FRMC: What can be done to ease the burden?
Dr Watkins: At least once a year, we review every
PA edit to determine whether it is still necessary. If we
areapprovingalmostalltherequests,wewillconsider
retiring the edit. When a new drug is approved by the
FDA[USFoodandDrugAdministration],weascertain
thelikelihoodofappropriateusewithoutourmanaging
it through PA. If we believe that to be the case, we will
trackthedrug’suptakeandwaittoseewhetheraPAis
needed.“Goldcarding”networkprovidersthathavea
good track record is another way of reducing burden
by applying a “trust and verify” approach instead of
prospectively reviewing each case.
DeKoven: Additionally, you could see PAs being
reserved for certain categories where payers need to
more aggressively manage products—for instance,
where products are easily interchanged.
Dr Cooke: These kinds of strategies certainly help.
Andnewsoftwaremaydecreasethemanpowerburden
for review. What about thinking outside the box? If
physiciansworkwithMCOstodevelopstandards—and
agree to those standards—perhaps there would not
PRIOR AUTHORIZATION:
Our Expert Panel
• Catherine Cooke, PharmD, research
associate professor, University
of Maryland School of Pharmacy;
and president, PosiHealth, Inc,
Baltimore, MD
• Mitch DeKoven, MHSA, principal,
health economics and outcomes
research, IMS Health, Danbury, CT
• Norm Smith, president, Viewpoint
Consulting, Inc, Langhorne, PA
• John Watkins, PharmD, MPH, BCPS,
formulary manager, Premera Blue
Cross, Mountlake Terrace, WA
• Michael White, PharmD, director,
clinical pharmacy, BlueCross
BlueShield of Tennessee,
Chattanooga, TN
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2. WWW.FIRSTREPORTNOW.COM FIRST REPORT Managed Care • FEBRUARY 2016
be a need for PA in those instances. I think something
like that is worth considering.
Smith:Somepharmaceuticalandbiotechcompanies
“contract” their way out of a PA, whereas others help
providers with them. This is often done by hiring a
group of field-based reimbursement specialists to
focus on a specific drug or condition. They know
how to overcome the hurdles. Also, organizations like
ours work with providers to improve the “payer value
proposition” through new clinical work or by fleshing
out new advantages of a drug.
Dr White: Electronic PAs for medications, covered
under either the pharmacy benefit or the medical
benefit, have been around for a while. We continue
streamlining that process so the various operating
systemsinterfacemosteffectively.Educatingmembers
and providers about formulary requirements is also
key to making PAs a smoother process.
FRMC: What other challenges do you see?
Smith: Two trends are changing this environment.
One is a commitment by MCOs to full integration
of EMRs [electronic medical records], which can
speedcommunicationbetweenproviders,payers,and
patients. There is also pressure on MCOs to provide a
betterpatient/memberexperiencebyremovingsome
of the burden involved in the PA process.
Dr Cooke: There are delays in care, and the impact
of that is not always fully appreciated. Patients may
not follow-up. I have seen instances where patients
with hepatitis C approved for therapy did not obtain
the medication because the PA process took so long.
Also, patients encounter stress from not being able
to get their medications at the pharmacy; it requires
more resources of them.
FRMC: How can these challenges be overcome,
or at least minimized?
Dr White: MCOs must continue to communicate
effectively with provider networks and members so
that both have a better understanding of the overall
utilization management process.
DrWatkins:Maintainingapositiverelationshipwith
physicians is always important, and we are trained as
pharmacists to exercise influence without authority.
We may know more about the drugs in question, but
we have to give the provider that information in a way
that does not interfere with the patient-provider rela-
tionship or reduce the patient’s confidence in them.
One way we do that is by supporting educational
outreach programs. For example, the Project ECHO
model provides education and guidance to provid-
ers treating patients with hepatitis C and HIV. We
encourage providers to tap into those resources to
make sure that the latest clinical practice guidelines
are followed.
FRMC: What other best practices do you
recommend?
Dr White: MCOs need to proactively inform
networks about changes to the formulary, which
gives providers time to adjust their processes. When
appropriate, communicating with members before
a change takes effect is also helpful.
DrWatkins:It’simportanttomakemedicalnecessity
guidelines as clear and concise as possible, and also
easily accessible to providers and patients. Base these
policies on sound clinical evidence and make that
evidence available when providers ask for rationale.
All of our drug criteria are approved by an inde-
pendent PT [pharmacy and therapeutics] com-
mittee consisting of outside experts. No one em-
ployed by our company has a vote. While a provider
may not always agree with our reasoning, I want
to at least reach a point in the conversation where
we can respectfully agree to disagree. Of course
we should be aware of clinical practice guidelines,
though some are more evidence-based than oth-
ers. If we disagree with external experts, we should
be prepared to defend our position scientifically.
DeKoven: For providers, think about modeling the
process, assigning responsibilities accordingly, and
developing management reports to monitor staff
productivity. If you find yourself providing the same
information each time, construct a form for each drug
to simplify the data collection process.
Smith: As long as insurers have the ability to imple-
ment true, fair actuarial premium rates, we’ll have
tools to manage members’ health. But my concern
is the low medical literacy of the population. Lack
of compliance, particularly with regards to lifestyle,
makes population health management difficult.
FRMC: What about instances where data is
unclear or guidelines conflict?
Smith: Data, especially in cutting edge areas, will
always be unclear. That’s why medicine is art and
not just science!
Dr White: Every PA decision is based on evidence
and thoughtful consideration, and every appeal is
individually reviewed by a pharmacist. It is important
that the process leave room for clinical judgment.
This should be based not only on guidelines and
FDA approvals, but on clinical trials and clinical
justification for the request.
Dr Watkins: Often there are big gaps in the avail-
able evidence, and that’s where experts will disagree.
We must acknowledge the evidence gap, use expert
opinion to fill it, and be respectful of those who
have reached a different conclusion. We also have a
responsibility to cut through the advertising claims
to get to thehardevidence.Beskepticalbutnotcynical.
In the end, make sure to obtain the best clinical sci-
encethatisavailableandfollowtheevidence.Doingthe
rightthingmaynotalwaysbethelowestcost,short-term
option,butitusuallypaysoffinthelongrun.That’sthe
underlyingassumptionofevidence-basedmedicine.■
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