“Prior authorization (prior auth, or PA) is a management process used by insurance companies to determine if a prescribed product or service will be covered” (DeMarzo). This typically applies to medications that have a high-cost price since insurance companies would rather pay for a cheaper alternative if patients are able to take them instead. The use of prior authorization can be viewed as a roadblock in the healthcare profession, as it can stall a patient from receiving therapy immediately since medications need approval prior to being dispensed at a pharmacy. The transformation of medications themselves, offering combination therapy or even an immuno-therapy such as a biologic, have been the cause in the increase of prior authorizations required on a daily basis.
Prior authorizations actually originated from the use of utilization reviews in the 1960s. Utilization reviews started at the beginning of Medicare and Medicaid legislation. Their primary use was to verify an admission in the hospital, which verified the need for treatment based on a confirmed diagnosis by two doctors. “A doctor who admitted a patient for a procedure that most doctors would consider outpatient, would be up for utilization review in an attempt to limit unnecessary hospital stays and cut costs” (Behrnedsen). This idea slowly transformed into present-day prior authorizations, insurances use prior authorizations as a filter to decipher which medications are worth reimbursing. While authorizations began as a reason to audit admissions, we now see authorizations used to determine if specific therapy is appropriate.
Now, most prior authorizations are typically done either by telephone or by web portals electronically. The contents of a prior authorization include patient demographics, insurance information, physician information, and clinical review. Insurance companies also referred to as PBMs, have different formularies that differentiate between which medications require prior authorization and those that do not. Response times can also vary pending which method you chose to conduct the PA. An electronic PA typically takes one to three days to have a response from the insurance company. A telephone prior authorization can be answered within a slightly better time frame, having a better chance of an automatic response, and allowing a physician to clarify any clinical information. After the form is submitted, the medication can be approved where it is billable at a pharmacy, or denied because the insurance determines the medication is not necessary. If a denial occurs, the physician has an option to file an appeal to dispute the arguments the insurance lists on the denial form.
As the process directly correlates to pharmacy reimbursement, the emergence of pharmacies completing prior authorizations has significantly increased. The streamlining of the authorization process benefits all three parties in the patient care process: the pharmacy, the physician, and the patient. With a solid foundation of prior authorizations, pharmacies are able to bill the medication sooner, physicians are able to focus resources on patient care instead of paperwork, and the patient receives their medication in a timely manner.
Specialty pharmacies have started this trend since most of their business deals with medications that require prior authorizations. Some of these medications include Humira, Otezla, Skyrizi, Enbrel, Mavyret, Epclusa, Harvoni, etc., most patients visit these specialty pharmacies because these medications cost more than $4,000 USD and need the lowest cost available. Specialty pharmacies provide such service by processing a medication through their pharmacy benefits coverage since it will typically cover most to all of the medication costs. The price of medications is only continuing to increase with the rise of gene therapies, biologics, and specialty products, which are slowly looking to become the standard of therapy. One of the things many prior authorization and field reimbursement specialists are doing is becoming Prior Authorization Certified Specialist (PACS) experts in the field. This is currently the first and only accredited training and certification program for prior authorization and field reimbursement specialists.