Written by Darcy Lewis
Sponsored by Abarca Health
Prior authorization (PA), where access, cost, and patient experience are met, has long been considered by many to be a necessary evil in efforts to contain U.S. pharmacy costs while improving clinical outcomes. But what if we could imagine a less frictional PA process that brought payers, pharmacy benefits managers (PBMs), specialty pharmacies, and clinicians together in the same room to solve problems rather than create them?
The invitation-only Abarca Forward Conference, hosted by PBM Abarca Health at its headquarters in San Juan, Puerto Rico, did just that. This problem consists of two important concepts. Advances in data technology and interoperability may render traditional PA methods obsolete, raising questions about their replacements. The discussion also emphasized that PAs have or will impact everyone who uses the health care system, whether they are patients or caregivers.
A gap remains between the original purpose of PA and its actual experience. For many stakeholders, processes designed to support appropriate care too often create friction, delays, and limited visibility at critical moments in patient care.
Current status of PA
PAs were created to protect patients, but they have gone from being a safety device to a bottleneck that hinders treatment, said Javier Gonzalez, Abarca’s president of PBM and commercial strategy. “Going back to the days of managed care, we built prior authorizations to balance safety, cost, and appropriate use, but over time, providers assumed more administrative burdens and providers and patients experienced friction, delays, and opacity.”
The data supports this, Gonzalez said, noting that providers are required to spend an average of $20 to $30 per PA, prescription abandonment rates hover between 30% and 40%, and tend to increase as PA delays typically extend to 14 days.
Tanvi Patel, vice president and general manager of Amazon Pharmacy, points out that consumer dissatisfaction stems from a lack of transparency in the PA process, and that even the aftermath of a vehicle accident is generally less transparent. “If you file your auto insurance claim, you know what’s going to happen next, even if you don’t like the outcome,” she said. “The adjuster comes in and determines what work needs to be done and who is at fault. The adjuster keeps us updated and lets us know when the check will arrive. Why can’t we treat our pharmacy customers with the same level of transparency?”
This analogy rings true for Colin Banas, MD, MHA, chief medical officer at medication management provider DrFirst. “From a provider’s perspective, it’s equally frustrating. We’re being asked to play the game without understanding all the rules,” he said. “The rules change from patient to patient, payer to payer, and situation to situation, and that puts us in the awkward position of being the financial intermediary between the patient and me.”
While many agree that lack of transparency is a challenge, it is less clear how to change it. “To make a difference, there has to be a willingness to share PA data with patients and healthcare providers. We discovered something with Amazon Pharmacy that doesn’t yet exist in the industry,” Patel said. “If you can drive that broad appetite, you can understand the how-to part. The whole reason Amazon got into pharmacy in the first place was because they believed it wasn’t as easy as it should be.”
Suzanne Trautman, Pharm.D., vice president of corporate pharmacy for Blue Cross Blue Shield North Carolina, acknowledges the need for greater transparency. If payers are using PAs as a cost-sharing mechanism without making it clear to physicians what those costs are, then they’re not supporting that process, he said, adding, “I would very much like to see that kind of transparency spread.”
While Troutman points out that many aspects of PA are working well (for example, efficient procedures have enabled BCBSNC to process 45,000 PAs each month), he calls for a continued focus on how PA can ultimately benefit the health system. “As we continue to improve efficiency and productivity, are we really reducing health care costs and improving health outcomes?” she said. “When it comes to PA, we need to make sure we’re continuing to do things for the right reasons.”
Getting the right treatments into patients’ hands faster is also a priority among all stakeholders, Gonzalez said, but “I don’t think we can move forward unless we create systems that incentivize doctors to prescribe appropriately, incentivize pharmacies to reduce waivers, and help payers increase accountability for speed and transparency.”
Regulatory changes could help
In the meantime, changes in the regulatory environment may address the lack of timeliness and other challenges. The Centers for Medicare and Medicaid Services Interoperability and Prior Authorization Rule (CMS 0057) mandates the adoption of HL7 FHIR-based APIs to streamline electronic prior authorization and sets standards for data exchange and system integration across healthcare settings.
Banas is quite optimistic. “I think the regulatory lever probably should have been pulled a little earlier because the carrot didn’t work,” he says. “We’re making progress, but the fact that a pizza order from DoorDash looks better than my patient’s life-saving Crohn’s disease medication situation is insane.”
Gonzalez noted that by 2027, health plans should have access to Fast Healthcare Interoperability Resources (FHIR)-based APIs to retrieve and send electronic PA (e-PA). “Since part of the payment based on physician quality will be based on electronic PA (e-PA), we need to figure out how to get closer to universal electronic transmission, very similar to what we had a few years ago when pharmacies decided to adopt the NCPDP standard for e-pharmacy transactions, even though the standards have not yet been harmonized on the medical side,” he said.
Additionally, there is the question of whether the advent of widespread e-PA will change the reliability of prescribing and conversations with patients in the clinical setting. Banas thinks this will happen. “Many times I would prescribe a medication, only to find out at my next appointment six months later that the prescription had not yet been filled,” he says. “By learning that in real time, we can now have transparent conversations with patients about copays and prescribe alternatives if copays are too high without waiting six months.”
Banas believes that providing more timely information via e-PA can reduce rather than increase administrative burden. “In the early days of EHRs, we were worried about giving patients full access to their records because we thought they would constantly call us every time they received a test result they didn’t understand,” he said. “Now that everyone has access to the portal, patients can see all their lab values and all their progress records right there. Patients are happy to learn, and we’ve actually seen fewer calls as a result.”
Mr. Gonzalez considered how the widespread use of e-PA could benefit stakeholders, noting, for example, that e-PA could trigger an investigation into whether there are associated co-pay assistance programs. “Right now, it may take a few days to get that information, but in the meantime, the patient is in severe shock and trying to figure out how to afford the medicine,” he said. “As we think about how to improve PA in the future, everything we do must focus on incentives, alignment, and consensus.”
Considering the human factor
When asked by the audience how the industry can leverage technology to reintroduce humanity to healthcare, Joe Cardosi, PharmD, MBA, founder and CEO of Free Market Health, focused on creating a more streamlined and responsive PA process. “The dream is to be diagnosed in the morning and be able to start treatment that afternoon,” he said. “In the meantime, patients just want to trust the system and know that their prescriptions will arrive when they need them, without having to advocate for themselves during a stressful time.”
In this scenario, a claim denial could automatically create a PA case, which could then trigger a treatment use case that collects patient clinical information through a health information exchange, according to Cardosi. The pharmacy then auto-populates the digitized payer PA form with clinical information, submits it via electronic prior authorization, and the treatment is approved within hours. “You can scale it just by stacking these use cases on top of each other,” he said.
As a pharmacist, Mr. Troutman emphasized the importance of considering drug safety as an important part of the PA process. “About a quarter of hospitalizations are still related to medications not being taken correctly,” she says. “We don’t want to focus too narrowly on PA, interoperability and data connectivity without maintaining the broader scope of drug safety that employer organizations and others are looking for.”
When Gonzalez ended the session calling for the single change, whether policy, technology or culture, that would best improve PA for tomorrow’s patients, Amazon’s Patel didn’t hesitate. “When you make a decision on behalf of a customer, imagine yourself in the room with that customer and think about whether you would make the same decision. If you don’t, you’re not doing it right,” she said. “It’s a simple culture change, but it’s not easy. It can have a huge impact on how you manage your business.”
