Electronic Prior Authorization Costs Should Be Measured In Pilot – Cmte.

The cost implications of automated prior authorization should be measured under the HHS pilot program on electronic prescribing, the National Committee on Vital & Health Statistics/Standards & Security Subcommittee said.

The subcommittee plans to recommend that electronic prescribing systems support real-time prior authorization for drugs, and that the impact of e-prior authorization on costs and quality of care be tested.

NCVHS is charged with making recommendations on electronic prescribing standards under the Medicare Modernization Act.

The discussion of the economics of automated prior authorization came in response to remarks by Express Scripts VP-Business Development Phillip Rothermich at the subcommittee's Aug. 19 meeting.

"The assumption seems to be that automating PA is a good thing, but that assumption is coming from a physician perspective," Rothermich said.

"Looking at it from a Medicare or payor perspective, it may or may not be a good thing. It hasn't been shown necessarily that automating PA helps to reduce costs. It may increase costs."

Several pharmacy benefit managers have opposed the use of real-time electronic prior authorization. During a July subcommittee meeting, Express Scripts, Medco and Cigna testified that the prior authorization process is "very complicated" and cannot be done successfully in real time (¹ (Also see "PBMs Object To Real-Time Prior Authorization In E-Prescribing" - Pink Sheet, 9 Aug, 2004.), p. 21).

Although e-prescribing would not automate PBMs' decision process on whether to grant prior authorization, it would simplify the process for prescribers and patients, subcommittee vice chair Jeffrey Blair, Medical Records Institute (Albuquerque), said.

"Sending the messages back and forth...might be automated communication but not necessarily automating the process within a PBM of how that decision is made, because that's going to be pretty complex. But you're removing a barrier to try and level the playing field," Blair said.

"Expediting prior authorization does not mean...always saying yes. But there is...a benefit of trying to expedite a response, whatever the response is," subcommittee member Marjorie Greenberg, National Center for Health Statistics added.

Automating prior authorization would also facilitate "clinically appropriate" prescribing, market research firm MediMedia Information Technologies President Brian Bamberger maintained.

The potential benefits of real-time prior authorization as part of an electronic prescribing system would outweigh the potential complexities of implementing such a system, Bamberger told the subcommittee Aug. 17.

"As e-prescribing becomes more commonplace, the rate of on-formulary prescribing will increase, making prior authorization more attractive as a cost-containment tactic."

"Automating the process will allow clinically appropriate prescribing," Bamberger said.

Bamberger noted that an automated system would be particularly useful for certain drug classes where prior authorization varies by plan.

COX-2s and proton pump inhibitors are examples of drug classes "where availability of lower cost options create prior authorization restrictions on many, many patients," Bamberger said.

"In today's paper world, a prescriber doesn't know if the drug is on prior authorization or not. While he or she quickly learns that it's likely that growth hormones or antifungal agents have been designated requiring prior auth, what trips him or her up are the therapeutic categories that are less consistent across plans."

"While it's more complex than 'yes or no'...computers were designed to automate paper processes like this," Bamberger added.

The standards subcommittee also endorsed NCPDP SCRIPT for the electronic transmission of prescription information (see ² (Also see "E-Prescribing Committee Endorses NCPDP Standard For Rx Transmissions" - Pink Sheet, 23 Aug, 2004.) ).

The committee plans meetings later in the fall to discuss additional issues, including electronic signatures and confidentiality.