A December 2017 study from the American Medical Association reported that 86 percent of physicians said that prior authorizations have increased during the prior five years, with 51 percent saying that they have increased significantly. The PA process for approval of high-cost specialty medications is burdensome, and costs pharmacies and physicians’ practices a lot in terms of time and money. Pharmacy prior authorization distracts from patient care, can delay care and even cause patients to abandon treatment. Outsourced insurance authorization services are a practical option for physicians to standardize in-office processes for handling prior authorizations, obtain prior approval quickly, and get paid for services provided.
Here are answers to frequently asked questions about pharmacy prior authorizations:
- What is pharmacy prior authorization?
Prior authorization (PA) is a requirement that healthcare providers obtain advance approval from a health plan before a specific procedure, service, device, supply or medication is delivered to the patient to qualify for payment coverage. Pharmacy prior authorization is the requirement for approval from the patient’s health plan for a prescription drug.
- Why do health insurance companies require pharmacy prior authorization?
Health insurance companies use a PA as a means to ensure that a drug prescribed is truly medically necessary and appropriate for the patient’s situation. PA is a method for minimizing costs by ensuring that the prescribed drug is the most economical treatment option available to treat the condition. 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.
- What types of drugs require PA?
According to Consumer Affairs, the following kinds of drugs are subject to PA:
- Brand name medicines that are available in a generic form
- Expensive medicines, such as those needed for psoriasis or rheumatoid arthritis
- Drugs used for cosmetic reasons such as medications used to treat facial wrinkling
- 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 are being used at doses higher than normal
- Blue Cross Blue Shield requires prior authorization for those drugs:
- that have dangerous side effects
- are harmful when combined with other drugs
- should be used only for certain health conditions
- are often misused or abused
- are prescribed when less expensive drugs might work better
- What are the steps involved in the pharmacy prior authorization process?
The physician prescribes a specific drug. If the prescription requires PA, the pharmacy will contact the physician who prescribed the medication and inform the provider that the insurance company requires a PA. 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. 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 review the request and may either authorize the drug or refuse to cover it.
- What are the common reasons why a patient’s prior auth request may not be approved?
- The patient did not give the insurance company, physician, and pharmacy enough time to complete the needed steps, which can take several business days.
- The insurance company denied the claim
- The insurance information was outdated or the claim was sent to the wrong insurance company
- The medication was not medically necessary
- 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 practice does not have the capability to manage PAs
- The physician did not meet payer guidelines
In some cases, the approval of the drug may be valid for a limited time such as one year or one month. In such cases, the authorization process must be restarted.
- How long does prior authorization take?
Obtaining a prior authorization is a time-consuming process for physicians and their staff. A 2010 American Medical Association (AMA) survey, found that physicians spend about 20 hours of a traditional work week on PA activities. The AMA also reported that more than 60% of physicians said they needed to wait at least one business day to complete prior authorizations, while 30% said they have had to wait three business days or longer to get a response on a prior authorization request. Further delays occur if coverage is denied and must be appealed. An appeal can take several days to process.
- What can be done if a prior authorization is denied?
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.
Prior authorization stands in the way of proper and timely patient care. In an AMA survey of 1,000 practicing physicians, nearly 90 percent of the physicians reported that the administrative burden related to PA requests has risen in the last five years, with most saying it has “increased significantly”. Led by the AMA, physicians, payers and other stakeholders are working to improve the prior authorization process.
Outsourcing the insurance authorization task is a reliable option to ease this burden. This brings us to the question – how do insurance authorization services work?
Insurance authorization companies have experienced personnel who act as an enabler 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 to obtain prior authorization for medications and services. Insurance authorization services cover the following:
- Verifying patients’ benefit information before the office visit, which will 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
- Managing any follow-up, such as getting more information from the physician for the pre-authorization
- Support for appealing denials
Insurance verification and authorization support is often a part of outsourced medical billing services.