Electronic PA: What Is It and How Does It Work?

Transaction Data Systems About The Author

Feb 24, 2016 3:30:00 PM

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If you’ve been working in a pharmacy for a while, you know what a claim rejection looks like and what it means for you – more time and work in order to complete the dispensing process. One claim rejection, in particular, has grown with the rise in new and specialty medications – prior authorization.

Luckily, there is a way to minimize the time and work associated with this particular claim rejection.

In case you’re unfamiliar with this, a prior authorization (PA) is a prescription that requires preapproval from the payer before the medication can be dispensed and reimbursed. Drugs that require a PA won’t be approved for payment until the prescriber satisfies the conditions of approval and the prior authorization is entered into the system.

Traditionally, prior authorizations are obtained by the pharmacist receiving a claim rejection and printing the detailed prescription information. The pharmacy must contact the prescriber and fax over the required information. Then, prescriber must get in touch with the PBM to find out what questions they need answered.

The PBM provides the questions. The prescriber answers them, and the PBM makes a determination on the prescription. In many cases the pharmacist is not notified of approved prescriptions, leaving them to continue attempting to send the claim until it goes through. The process in its entirety can take on average five days and rack up additional transaction fees for the pharmacy.

While this process has a tendency to be quite an inconvenience to prescribers, pharmacies and patients it is required for a good reason. It helps avoid inappropriate drug use and promote the use of evidence-based drug therapy.

Unfortunately, because it is such an inconvenience and, in its traditional format, time consuming it’s estimated that 40-70 percent of patients that are put on hold while the pharmacy obtains prior authorization abandon the prescription. That is a large percentage of patients that are not getting the medication they need. This number could have a detrimental effect on your pharmacy’s Medicare-D 5-star rating.

A recent studied showed that over 200 million claims are rejected each year due to prior authorization or PA-like requirements. With these kind of numbers, it’s no wonder that companies like CoverMyMeds have found such success in addressing this ever-growing problem.

CoverMyMeds is the leader in electronic PAs. They interface with most major pharmacy software vendors and many PBMs. By introducing electronic PAs, they remove the phone calls and back-and-forth faxes from the process and replace them, on the part of the pharmacist, with a simple click of a button. CoverMyMeds estimates that using electronic PAs reduces the time spent requesting PAs by 80 percent (from 15-20 minutes to 3-5 minutes) and they amount of time for a turnaround from 3-5 day to a matter of hours.

Many pharmacy software vendors interface with electronic PA companies. Therefore, if you receive a claim rejection due to prior authorization requirements you can click the button designated in your pharmacy software. The electronic PA company will generally populate the correct form and allow you to complete any necessary information before sending it to the prescriber for review and authentication. The electronic PA will then be sent to the payer for authorization.  

The payer is also one of the PBMs that interfaces with the electronic PA company. In this case you will receive notification when the PA has been approved and filed, so that you can finish dispensing the medication.

Sometimes the prescriber is aware that the prescription will require a PA. They can send the electronic PA to the payer before your pharmacy ever receives a claim, eliminating claim rejection. However, this is not often the case.

If you’re interested in learning more about how the CoverMyMeds interface with Computer-Rx software works to reduce the time you spend on PA claim rejections, I encourage you to join us for a free webinar on March 10th.

Learn more about this webinar or register below!