Electronic Prior Authorization – Now is Finally the Time


By Tony Schueth, CEO & Managing Partner

If you want to hit the healthcare jackpot in 2015, there’s one place you should place your chips:   electronic prior authorization (ePA) for medications.  The medication prior authorization process can now be dramatically streamlined via an ePrescribing transaction. The “endpoints” are now building or have built the infrastructure to take medication prior authorization from a days to weeks long endeavor to a fully electronic process that can be completed in 1-2 minutes within existing prescriber and pharmacy workflows.  There is no need to “pass GO” – the industry is at GO! 

Prior authorization is intended to be a cost-saving measure that helps ensure the safe and appropriate use of selected prescription drugs and medical procedures.   Current manual processes involving paper/phone/fax are very costly to administer for physicians, pharmacies and PBMs and, without automation, their administrative burdens will grow exponentially as volume and requirements for PA increase, particularly for specialty medications.

Paper-based ePA is a very time consuming process, and the cost of phone calls and faxes to gain approval is well understood by physicians and pharmacies. The current process, which takes 15 days on average, often results in prescription abandonment.

Electronic prior authorization enables providers to deliver more proactive care and keep patients healthy with efficient access to medications. In 2011, the National Council for Prescription Drug Plans (NCPDP) ePA Task Group learned that  ePA is #1 ePrescribing capability desired by doctors. Then last year, NCPDP approved an electronic data interchange (EDI) standard for ePA, after a successful pilot supported by industry leaders Allscripts, CVS Caremark, Navinet/CoverMyMeds and Surescripts.  

While prior authorization can be simplified through prescriber and PBM/payer portals, its full potential can be achieved with full integration into the ePrescribing workflow of EHRs. This ePA workflow is supported by the NCPDP SCRIPT standard described above, and is “prospective” because it is initiated by the prescriber and occurs before the electronic prescription is sent to the pharmacy.  When the prescriber is notified in real-time of a PA requirement, four things typically happen  when the NCPDP SCRIPT standard is integrated with the EHR: 

  1. The prescriber answers PA specific questions based on the patient, plan and medication. Patient information may be pre-populated from the EHR.
  2. The PA request is transmitted in real-time to be PBM and the prescription is pended.
  3. The PBM returns an approval (or rejection) typically within 1-2 minutes.
  4. The preapproved, clean ePrescription is routed to the pharmacy.

More advanced implementations will support appeal requests/responses and cancel requests/responses.  

EHR vendors are evaluating requirements for integrating ePA into their applications, and prioritizing ePA into their development roadmaps.  Considering that  Surescripts found that 28% of physicians surveyed would switch their EHR vendor for ePA, this is a good move for EHR vendors.

Companies to watch in the ePA space include CoverMyMeds and Surescripts.  CoverMyMeds introduced the industry’s first API for EHR vendors earlier this year and has a long track record of success with their ePA Portal.  Surescripts is rolling out CompletEPA, their real-time ePA solution integrated into the EHR workflow. Services such as CoverMyMeds offer connectivity for all ePAs because even if the PBM or payer aren’t electronically enabled, electronically-initiated ePAs are delivered via fax. 

Looming overhead are regulatory requirements. A number of states, including MN, ND, MD and CO have mandated use of ePA beginning in 2015, and 10 other states have active regulatory activity which involves ePA. The coming regulatory mandates afford EHR vendors the opportunity to be ahead of the curve.  Rather than scrambling to meet multiple state regulatory deadlines at the last minute, vendors can begin development now to include ePA functionality while there is still breathing room to concentrate on workflow enhancements.With this approach, ePA will become as valuable to providers as ePrescribing.

Now is the time to spread the word about the new SCRIPT standard for ePA and its value.  To learn more, visit www.ncpdp.org.  If you are an EHR, health plan, PBM or pharmacy information network, now is the time to integrate ePA through implementation of the SCRIPT standard or through partnering with a company that offers a plug-and-play solution.

The time is right for standardized electronic prior authorization for medications. 


Why Physicians Will Take the Meaningful Use Penalties Rather Than Participate


By Michael Burger, Senior Consultant

Another Meaningful Use (MU) attestation deadline is here. If the past is prologue, physician attestation rates will continue to be much lower than expected. This has policymakers scratching their heads as to what’s going on, and questioning the return on their meaningful use investment. In a story reported by website Politico, Rep. Michael Burgess (R-Texas), a former obstetrician/gynecologist, was quoted last month saying. “As we get to the end of those dollars and they’ve been expended, have we gotten what we’ve asked for?” “Probably not exactly, and some of that responsibility lies in the United States Congress for sure.”

Like many things in life, it’s all about the money. Or is it?

As we’ve been saying for a while, there’s a small but growing cohort of physicians who are willing to withstand the MU penalties rather than move their practices into stage 2. Why? Because the MU penalty phase isn’t enough of a financial hit to negatively affect the bottom line. The result: signing up for–or continuing on with–MU isn’t really worth it.

This is very counterintuitive to the “carrot and stick” design of the program. MU was created by policymakers on the premise that incentive payments would get physicians on board by eliminating a primary objection – cost.  And if the incentives weren’t enough, the dings to their Medicare reimbursements would pull them into the MU fold.

However, given the drops in attestation rates, something else appears to be going on. A little back-of-the-envelope math provides some insights.

In an interview in  Modern Healthcare, Jason W. Mitchell, MD, former Director of the Center for Health Technology at the American Academy of Family Physicians (AAFP), explained why medical practices may decide to take the penalties in lieu of participating.

He pointed to a scenario of the average family doctor, who receives about $100,000 annually in Medicare reimbursements. If there’s a 1% penalty for failing to achieve Meaningful Use Stage 2 in 2014, this will cost about $1,000 in 2015. These penalties escalate to 2% in 2016 and 3% in 2017—a combined three-year total of just $6,000, he explained.  “Add that $6,000 in Medicare penalties to additional incentive payments they won’t receive by failing to achieve Stage 2, and it doesn’t represent a catastrophic loss of income.”

While this is an interesting observation, digging down another layer offers more possible reasons why physicians may be bailing on MU stage 2. A hit of $6,000 in gross income for the MU penalty phases amounts to the typical physician seeing an additional 40 patient visits per year (@ $150/visit). That’s less than one patient visit a week.

Moreover, if physicians are concerned that using an electronic health record (EHR) slows them down, NOT using an EHR (or not using the EHR to track the MU measures, which many feel are irrelevant anyway) easily enables the doctor to add 40 more visits annually.   Even if they only see two additional patients a week, they’ll more than overcome the penalties.

While some may consider this to be a contrarian view of MU, we suggest that this is one way some physician practices are viewing MU stage 2 and why they are taking the penalties in lieu of participation. It’s all about the money. Or is it?


Diagnosis in ePrescribing – Now is the time for the next generation of ePrescribing!


By Michael Burger, Senior Consultant

ePrescribing has now surpassed the “tipping point” with greater than 60% of prescriptions issued electronically. That percentage is expected to increase as the late adopters overcome objections and join the ranks of the majority.  

Reaching the tipping point has been 10+ years in the making.The design premise for ePrescribing years ago was to duplicate the paper prescribing process.This is because then, the competition was not between different EHRs and ePrescribing software, it was between using pen and paper versus using a computer. This meant that features that would add value (such as adding a diagnosis) were not included, because requiring a diagnosis for an ePrescription created a requirement that didn’t exist for paper prescribing – creating a barrier to adoption.

ePrescribing technology today is largely unchanged from its debut more than a decade ago. Now that basic ePrescribing is “mature,” the time is right for innovation to increase the value of ePrescribing past the bellwether administrative savings.

One such innovation is the inclusion of diagnosis with an ePrescription. A recently published study (Warholak et al. / Research in Social and Administrative Pharmacy 10 (2014) 246–251) highlights some very promising results of a pilot study regarding including diagnosis on electronic prescriptions.

The study, conducted at a community health center over two four-week phases evaluated a total of 1,888 ePrescriptions at the center’s pharmacy. The first phase investigated conventional ePrescriptions that did not contain a diagnosis. In the second phase, prescribers were asked to include the patient diagnosis in each ePrescription.

The results of the study are interesting, and in some cases, surprising. The study found that the rate of intervention was 3.9% for the ePrescriptions without diagnosis, compared to a 1% intervention rate for ePrescriptions with diagnosis.   Potential drug-drug interactions, missing information, therapeutic duplication and excessive dose were the most frequent reasons for intervention in the pre-diagnosis group. In the post-diagnosis period, the results were similar except that excessive dose did not rank among the top 3. The most common actions in both phases were to consult the prescriber and to review the patient profile/medication history.

Instinctively, one would think that providing the pharmacist with diagnosis would increase the incidence of drug therapy problems. The study found the opposite, with almost a 3-fold decrease in pharmacist/prescriber consultations to clarify or correct prescription orders. The authors suggest that “a greater understanding of the prescribers’ reasoning may help the pharmacist better reassess the medication related problems during DUR.”

The authors further observe it is possible that by virtue of asking prescribers to cite the diagnosis, they became “better” prescribers. This possibility requires further study to determine if requiring a diagnosis does yield higher quality prescriptions, and if the change in quality is temporary or permanent. 

Despite the widespread adoption of automated formulary and DUR checking within electronic prescribing applications, doctors and patients still rely on pharmacists to be the final “quality check” to ensure safe and effective prescribing.  Given that very important role, it seems a very small investment of a prescribers’ time to include diagnosis when ePrescribing.