Prior authorization process lightened by electronic information

August 1, 2005

Prior authorization has evolved into a more-efficient process.

Prior authorization is one of those tools that makes physicians and patients frustrated with managed care. Its objectives still remain to manage the utilization of drugs that are: at risk for inappropriate utilization and in some cases toxicity, if used inappropriately; used in ways that fall outside the FDA-approved indication; and high cost. The process, however, has become more streamlined and like most everything else in the 21st century, can be administered electronically, creating less intrusion into the management of the pharmacy benefit.

"Prior authorization is alive and well," says David Calabrese, RPh, MHP, vice president of clinical services for MedMetrics Health Partners Inc., a PBM company in Worcester, Mass. "It is critical in managing formulary and with an increase in the development of expensive biologics, has become even more important. No matter how aggressive Pharmacy and Therapeutic committees are, they still need to limit certain drugs to the most appropriate candidates. If there is a risk of inappropriate use of a particular drug, prior authorization can manage its utilization."

Perry is concerned that prior authorization may not be cost-effective if most reviews are being denied anyway. The price tag for the process may erase any savings accrued from not covering the drug, she says.

LESS INTRUSIVE

"The biggest innovation we see with prior authorization at Medco is the desire to make the process easier and friendlier for the member and physician," says Glen Stettin, MD, vice president of clinical products for Medco Health Solutions based in Franklin Lakes, N.J. "It should not be a procedure that hassles people when there is enough information available to preclude even using it."

He points out that some reviews are unnecessary if drugs are prescribed for the diagnoses for which they have been approved. On the other hand, prior authorization can be valuable in certain high-utilization and/or high-spend categories, such as COX-2 inhibitors, proton pump inhibitors and lifestyle drugs, and in categories where drugs are used for an unapproved indication.

Among Medco's 8 million members, the number of coverage reviews, including cost savings, step therapy, and quantity, dosing and duration provisions, has increased almost 10 times since 1998, growing from 115,000 to 1.1 million. Clients saved approximately $780 million in 2003, doubling in the past six years. Stettin says that the use of coverage review policies can generate savings of up to 4% for a plan sponsor's overall drug spending.

Medco's prior authorization policy allows for temporary coverage overrides, enabling patients to receive a few days' to a full month's supply of a drug while waiting for approval. "If they only receive a partial supply, they can obtain the rest under the same copayment," Dr. Stettin says.

Although the approval rate for some drugs under review may be high, Dr. Stettin says that many patients who are prescribed a medication that requires prior authorization opt for another drug instead, resulting in cost savings for the plan sponsor.

One more trend seen by Dr. Stettin is increased use of prior authorization by employers, who he says realize savings; on the other hand, some of the health plans do not see the same value.

Prior authorization has entered the computerized world through e-prescribing, streamlining the process and sharing criteria at the point of prescribing. Dr. Stettin says that electronic prior authorization provides computerized, evidence-based protocols that may result in approvals without review.