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AHA, AMA and Others Offer 5 Prior Authorization Reform Strategies

Automating prior authorizations and limiting the programs to providers with poor performance are among the top strategies six industry groups offered for prior authorization reform.

Prior authorizations

Source: Thinkstock

By Jacqueline LaPointe

- Six industry groups representing providers, payers, and pharmacists recently partnered to identify strategies to improve prior authorization processes, such as decreasing the number of providers subject to prior authorizations and automating prior authorization processes.

Prior authorizations create administrative burdens for providers, patients, and payers, the American Hospital Association (AHA), America’s Health Insurance Plans (AHIP), American Medical Association (AMA), American Pharmacists Association (APhA), Blue Cross Blue Shield Association (BCBSA) and Medical Group Management Association (MGMA) agreed.

The process ensures prescribed treatments are safe and cost-efficient prior to delivery. However, the process to pre-approving treatments can be repetitive and differ by health plan.

Prior authorization requirements are also increasingly carving more time out of a provider’s day. About 86 percent of providers reported an increase in prior authorization requirements in 2017, an MGMA survey found.

Patients may also experience delays in care because of prior authorizations. Approximately 90 percent of participants in a 2017 AMA survey stated that prior authorizations sometimes, often, or always delay care.

READ MORE: Payer, Provider Dialogue Key to Prior Authorization Reform

The industry groups aim for their partnership to relieve the administrative burden and care access challenges associated with prior authorization requirements.

“By forging an agreement addressing an important set of prior authorization challenges, this collaborative is leading the industry toward the dual aim of reducing the volume of required authorizations and decreasing complexity in conducting these transactions,” stated Anders Gilberg, MGMA Senior Vice President of Government Affairs.

The groups identified five strategies for prior authorization improvement and agreed to take specific actions to implement each strategy.

Reduce the number of providers subject to prior authorization processes

Payers should limit the number of providers subject to prior authorization processes based on historical performance, the groups suggested.

“Differentiating the application of prior authorization based on provider performance on quality measures and adherence to evidence-based medicine or other contractual agreements (i.e., risk-sharing arrangements) can be helpful in targeting prior authorization requirements where they are needed most and reducing the administrative burden on health care providers,” they wrote.

READ MORE: How to Maximize Revenue with Improved Claims Denials Management

Payers should exclude providers who have demonstrated ordering and prescribing patterns that align with evidence-based guidelines and who have historically high approval rates.

The industry groups agreed to implement the following processes to develop selective application of prior authorization:

• Promote the use of programs that selectively implement prior authorization requirements based on provider performance and adherence to evidence-based medicine

• Encourage the creation of criteria to select and maintain providers in the selective prior authorization programs using input from contracted providers

READ MORE: Preparing the Healthcare Revenue Cycle for Value-Based Care

• Make criteria transparent and easily accessible to providers

• Promote appropriate adjustments to prior authorization requirements for providers in risk-based contracts

Frequently review services, medications that need prior authorization

Regular reviews of medical services and prescription drugs needing prior authorizations are key to reducing administrative burdens on providers. Payers should frequently assess prior authorization lists to ensure therapies that are rarely used or have low prior authorization denial rates are eliminated from the list.

Reviews will also help payers to identify new services, such as innovative treatments, that may need prior authorization. New treatments may need pre-approval because they lack evidence on the t effectiveness or impact on patient safety.

The six industry groups agreed to assess the list of service and medications required for prior authorization on at least an annual basis. The groups also encouraged payers to use provider input to review lists.

Additionally, the groups plan to promote prior authorization requirement modifications, including the list of services subject to the process, based on data analytics and updated clinical criteria.

Payers should share any changes with other stakeholders through a provider-accessible website and via at least annual communications to contracted providers, the groups added.

Enhance communication between payers, provider, patients

Open communication channels between payers, providers, and patients can reduce care delays and ensure providers know of and understand prior authorization requirement changes in a timely manner.

To achieve transparent, open communication, the groups committed to the following:

• Enhance existing communication channels between stakeholders

• Promote transparency and easy accessibility of prior authorization requirements, criteria, rationale, and changes

• Encourage improved communication channels to support timely submission of complete information needed for prior authorization determinations as early in the care delivery process as possible and timely notification of determinations

Communication channels should also include dispensing pharmacists, as well as healthcare providers, the groups emphasized.

Preserve care continuity for patients

Payers and providers should protect continuity of care for patients receiving an active course of treatment regardless of formulary or treatment coverage changes. Changes to prior authorization requirements can disrupt a patient’s treatments.

While several standards, including state and federal laws and private accreditation standards, already exist to combat disruptions of care, additional efforts are still needed to preserve care continuity associated with prior authorization processes, the groups argued.

Additional efforts include protections for patients who are undergoing an active treatment course and face a formulary or treatment coverage change or change of health plan that could disrupt their treatment.

Stakeholders should also reduce repetitive prior authorization requirements to support care continuity for medical services and medication for patients on an “appropriate, chronic, stable therapy.”

Adopt automated prior authorization processes

Industry-wide adoption of electronic prior authorization processes that follow existing national standards is critical to streamlining prior authorizations for providers, payers, and patients.

Automating the process can also make prior authorization requirements and formulary information electronically accessible to providers at the point-of-service through EHR or pharmacy systems. Having the information easily accessible in a patient’s record can increase process efficiencies, decrease time to treatment, and minimize prior authorization requests.

To encourage industry-wide adoption of electronic prior authorization processes, the industry groups agreed to the following:

• Promote all healthcare stakeholders to accelerate the use of existing national standards for prior authorizations, such as the National Council for Prescription Drug Programs ePA transactions and X12 278

• Support adoption of national standards for electronic exchange of clinical documents

• Urge providers and health plan partners, such as clearinghouses and EHR vendors, to create software and processes that support prior authorization automation using national standards

• Encourage the communication of updated prior authorization and step therapy requirements, coverage criteria and restrictions, drug tiers, relative costs, and covered alternatives to providers via websites and to EHR, pharmacy system and other vendors so they can integrate the information into systems for providers to access at point-of-care 

“Technology adoption by all involved stakeholders, including health care providers, health plans, and their trading partners/vendors, is key to achieving widespread industry utilization of standard electronic prior authorization processes,” the groups stated.

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