Tag: Prior authorization

Prior Authorization in Healthcare: A Primer

Guest post by Saqib Ayaz, co-founder, Workflow Management & Optimization.

Saqib Ayaz
Saqib Ayaz

Have you ever faced the dilemma when you visited a hospital or a pharmacy and have been told that the impending treatment or even the prescription will need a prior authorization?

Prior authorization has been a topic of debate in the healthcare industry for quite some time and it is important to understand the process in detail to be able to take the informed decision when required.

What is Prior Authorization in the healthcare sector?

Healthcare industry, in general, is quite complex in nature with a large number of standard rules and procedures to be followed. The concept of prior authorization or pre-authorization as it is commonly called is generally used during the payment from the insurance partner.

Prior authorization in the medical industry is an intermediary step mandated by the insurance partner that requires an approval from the insurance company in order to take a decision on whether they will/will not reimburse the cost of a certain treatment/prescription/medicine. To put in simple words, healthcare prior authorization is a health plan cost-control process that requires obtaining approval before performing a service to qualify for payment.

Important points regarding prior authorization

Prior authorization predicament

Like any other process, there are pros and cons of the prior authorization process as well. While the process brings a certain accountability and cost containment for the players; fighting over prior authorizations costs several hours in lost productivity and an incredible amount lost in revenues as well, thus putting everyone in a difficult position.

The American Medical Association (AMA) along with the other stakeholders from the healthcare industry believes that prior authorization is actually a burdensome process that hinders the productivity and also timely access to treatment. The process puts a barrier for the patients in immediate need of the medical care by delaying the start of the necessary treatment/medical assistance required by the patient that can significantly impact the health outcomes.

The Current Reality

A recent survey conducted by the American Medical Association (AMA) reveals certain shocking findings:

What are the disadvantages of the Prior Authorization process?

The Road Ahead

Considering the inefficiency of the process of prior authorization and the various hurdles the patients seeking medical care faces, the American Medical Association (AMA) along with a group of experts from other medical and healthcare organizations came together in an effort to reform the inefficient prior authorization requirements imposed on the patients during the medical tests, devices, drugs, prescription and etc.

Purpose of the AMA and other medical organization coalition

The main purpose of the coalition represented by the hospitals, patients, medical group, pharmacists and physicians, is to make the process of pre-authorization simpler, faster and smoother.

The joint forum believes that the requirement of the pre-approval by insurers in the form of pre-authorization before patients can get the prescribed drugs or treatments can not only delay or interrupt medical services, but also poses the risk of medical complications due to delays in the process.

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Reducing the Negative Side of Prior Authorization

Guest post by Robert S. Oscar, R.Ph. CEO and president, RxEOB.

Robert Oscar
Robert Oscar

Prior authorization exists to reduce drug costs, to manage appropriate brand medication prescribing, and to curb medication abuse. Despite its good intentions, this extra step to determine whether or not a drug is appropriate for a patient’s symptoms has gained a reputation of inconvenience for both physicians and consumers.

In a 2013 study by SUNY Upstate Medical University, it was revealed that U.S. primary care physicians and their office staff have experienced significant increases in time consumption as a result of prior authorization and its associated requirements. For consumers, hours can be wasted waiting to find out whether or not they are allowed a particular prescription under the conditions of their health plan.

Reducing this negative aspect of prior authorization is paramount for the betterment of overall health costs and medication adherence. By streamlining the time spent between medical record lookup and prescription delivery, healthcare organizations and consumers can begin to experience more efficient prior authorization. If efforts made toward better big data advancements, mobile health (mHealth) and health IT are prioritized, doctors can confirm drug eligibility faster to help their patients recover faster.

Below are five reductions that can come from implementing electronic prior authorization (e-PA):

Reduced Labor Costs: When a doctor pulls up a patient’s medical records he must sift through numerous data points to determine which drugs are approved and which drugs are going to require prior authorization. The hours spent processing this data is costly for healthcare staffing, but lost time can be reduced by moving the process online and implementing electronic methods. This can allow physician offices and PBMs the ability to review, submit and determine authorization almost immediately.

Reduced Consumer Delays: A consumer will typically experience the unattractive side of prior authorization at the pharmacy. If a doctor issues a prescription without knowing the patient’s medication history or pushes a popular name brand drug without suggesting a generic, the consumer will likely get sidelined with prior authorization processing at the point of sale. Having an e-PA process that can review and determine which drugs a patient is already approved for before they head to the pharmacy can reduce customer wait times and greatly increase consumer satisfaction.

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