The healthcare industry has made quicker progress in automating prior authorization for prescription drugs than it has for medical services. That’s in large part because most electronic pharmacy prior authorizations are enabled by a transaction standard that works.
Officials for the National Council for Prescription Drug Programs realized in the early 2000s that the standard for electronic prior authorization that is mandated by the Health Insurance Portability and Accountability Act of 1996 didn’t adequately support pharmacy operations.
So it convened stakeholders to develop what is called the “Script” standard, which allows physicians to communicate certain information necessary to the authorization process that the HIPAA-mandated X12 278 regulation did not. Now 70% of pharmacy benefit managers have implemented the Script standard, despite HIPAA being the law of the land, according to Margaret Weiker, the National Council’s director of standards development.
HIPAA is still a hurdle to getting full adoption, she said. But a CMS proposal to require all Medicare Part D plans to use the Script standard for electronic prior authorization beginning in 2021 will help boost uptake, she said.
The Script standard supported Express Scripts in reaching the point where 55% to 60% of all of its prior authorizations are electronic, said Lynne Nowak, the PBM’s leader of the provider services group. But the process still sometimes requires physicians to answer questions to justify the prescription.
The ultimate goal, which Express Scripts is working toward, is to use its own data and connections into a physician’s electronic health record to extract information needed for prior authorization without ever having to bother the physician, Nowak said.
The company is also helping physicians avoid the need to jump through the prior authorization hoops by giving them more clarity about which drugs require pre-approval. Its real-time benefit tool tells the physician whether a drug is covered under the patient’s benefits, how much it costs, and if it requires authorization.
Physicians opt for a different drug that doesn’t require prior authorization about 40% of the time and avoid the hassle altogether, Nowak said. It took a huge investment to put the clinical criteria into an electronic format, and the standards helped enable that. “The lack of standards on the medical side make it a lot harder,” she said.
Electronic prior authorization for medical services is still done using the 278 standard, which experts say doesn’t meet the industry’s needs.
Kim Diehl-Boyd, senior director of industry relations and government affairs at CoverMyMeds, a software company that helps automate prior authorization, said innovations on the medical side of the industry, including industry experiments with FHIR standards, could help bring more efficiency on the pharmacy side as well.
That’s why while CoverMyMeds supports the National Council for Prescription Drug Programs’ Script standard, its executives worry that the CMS’ proposal to require all electronic prior authorizations to use that standard would limit future innovation.
“There's the potential that you do lock the industry into using only one methodology,” Diehl-Boyd said. “Let's say in five years there's another methodology that works even better, but you've got regulation that calls for one standard. That can be problematic.”
