By Darcy Lewis
Sponsored by Abarca Health
Prior authorization (PA)—where healthcare access, costs, and patient experience meet—has long been considered by many as a necessary evil in the effort to rein in U.S. pharmacy costs while improving clinical outcomes. But what if payers, pharmacy benefit managers (PBMs), specialty pharmacies, and clinicians could get together in the same room to imagine a lower-friction PA process that solves problems, not creates them?
The invitation-only Abarca Forward conference, hosted by PBM Abarca Health at its headquarters in San Juan, Puerto Rico, did exactly that. Two key concepts framed the issue: advances in data technology and interoperability could render traditional PA methods obsolete, prompting questions about what will replace them. The discussion also emphasized that PA affects or will affect everyone who uses the healthcare system, whether as a patient or a caregiver.
A gap remains between PA’s original purpose and how it is experienced in practice. For many stakeholders, a process designed to support appropriate care now too often creates friction, delay, and limited visibility at critical moments in the patient journey.
The current state of PA
Although PA was created to protect patients, it has gone from a safeguard to a bottleneck that can hinder care, said Javier Gonzalez, President, PBM & Commercial Strategy at Abarca. “Way back in the utilization era of managed care, we built prior authorization to be the balance between safety, cost, and appropriate use but, over time, providers have come to bear the administrative burden while they and patients experience friction, delay, and opacity.”
The data bear this out, Gonzalez said, noting that providers must spend an average of $20 to $30 per PA, and prescription abandonment rates hover between 30% and 40%, trending to the higher end when PA delays commonly balloon to as long as 14 days.
For Tanvi Patel, Vice President and General Manager, Amazon Pharmacy, consumer frustration stems from the lack of transparency in the PA process, noting that even the aftermath of a vehicular crash is typically less opaque. “You submit an auto insurance claim and, even if you don’t like the outcome, you know what will happen next,” she said. “An adjuster will come out to determine what work is needed and who was at fault. They keep you updated and let you know when to expect a check. Why can’t we treat the pharmacy customer with that same level of transparency?”
This analogy rings true to Colin Banas, MD, MHA, Chief Medical Officer of the medication management provider DrFirst. “From the provider perspective, it's equally frustrating. We’re being asked to play a game without understanding all the rules,” he said. “The rules change per patient, per payer, and per situation. And it puts us in this awkward position of being a financial intermediary between my patient and myself.”
While many agree that lack of transparency is a challenge, what’s less clear is how to change that. “There has to be a willingness to share PA data with patients and providers for change to occur. We have found at Amazon Pharmacy that doesn't exist in the industry yet,” Patel said. “If we can encourage that widespread willingness, we can figure out the how-to part. The whole reason why Amazon got into pharmacy in the first place is because we believed it wasn't as easy as it should be.”
Suzanne Trautman, PharmD, Vice President, Corporate Pharmacy, Blue Cross Blue Shield North Carolina, acknowledges the need for increased transparency. If payers are using PA as a mechanism to share costs without being clear with physicians about what those costs are, payers are not helping the process, she said, adding: “I’m very much looking forward to seeing that kind of transparency become widespread.”
Even as Trautman noted that many aspects of PA are working well—efficient procedures allow BCBSNC to process 45,000 PAs each month, for example—she urges a continued emphasis on how PA can ultimately benefit the healthcare system. “Even as we continue to drive efficiencies and productivity, are we truly improving medical costs and improving health outcomes?” she said. “We need to be sure we’re still doing things for the right reasons when it comes to PAs.”
Getting the right therapy into the patient’s hands more quickly is also a priority among all stakeholders, Gonzalez said, but “Until we create a system that incentivizes physicians to prescribe appropriately and pharmacies to reduce abandonment and helps payers increase their accountability for speed and transparency, I think we're not going to move forward.”
Regulatory changes may help
In the meantime, changes in the regulatory environment may help 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 authorizations and sets standards for data exchange and system integration across healthcare settings.
Banas is fairly optimistic: “I do think the regulatory lever is something we probably should have pulled a little bit sooner because the carrot wasn't working,” he said. “We're making progress, but the fact that I have better visibility into my pizza order from DoorDash than the status of a lifesaving medication for my patient’s Crohn's disease is insane.”
Gonzalez noted that, by 2027, health plans will have to make available the Fast Healthcare Interoperability Resources (FHIR)-based APIs to retrieve and transmit electronic PAs (e-PAs). “Part of the physician quality payment is going to be based on an electronic PA (e-PA), so we have to figure out how to get closer to universal electronic transmissions very much like years ago when pharmacy decided to adopt NCPDP standards for electronic pharmacy transactions, even though the standards are not yet aligned on the medical side,” he said.
Then, too, there is the question of whether the advent of widespread e-PAs will change prescribing confidence or patient conversations at the point of care. Banas thinks it will: “Too many times, I’ve prescribed a medication, only to realize on the next visit six months later that the prescription was never filled,” he said. “For me to learn that in real time, I could have transparent conversations with the patient about their out-of-pocket expenses and, if they’re too high, prescribe an alternative without waiting half a year.”
Banas believes that offering more timely information via e-PA could ease the administrative burden, not add to it. “In the early EHR days, we worried about giving patients full access to the record because we thought they’d be calling constantly every time they received a lab result they didn’t understand,” he said. “Now having everyone in the portal means patients can see all their lab values and all their progress notes right there. Patients happily educated themselves and phone calls actually went down as a result.”
In thinking about how widespread e-PAs could benefit stakeholders, Gonzalez noted that an e-PA could trigger an inquiry into whether a relevant copay assistance program exists, for example. “Right now, it might take a few days to get that info and, meanwhile, the patient is in sticker shock and trying to figure out how to afford the medication,” he said. “When we think about how to improve PA in the future, everything we do should be focused on incentives, alignment, and consensus.”
Considering the human factor
When an audience member asked how the industry can leverage technology to reintroduce humanity into healthcare, Joe Cardosi, PharmD, MBA, founder and CEO of Free Market Health, zeroed in on creating a more streamlined, responsive PA process. “The dream would be to receive a diagnosis in the morning and be able to start a therapy that same afternoon,” he said. “In the meantime, that patient just wants to trust the system and know their prescription will arrive when it’s supposed to, without them having to advocate for themselves during a stressful time.”
In this scenario, Cardosi said, a claim rejection would auto-create a PA case that could then trigger a treatment use case to collect patient clinical information through the health information exchange. Then the pharmacy would auto-populate the clinical information on a digitized payer PA form to submit that via electronic prior authorization and hours later, the therapy is approved. “Just stack those use cases,” he said, “then we can move to scale that.”
As a pharmacist, Trautman emphasized the importance of considering medication safety to be a vital part of the PA process. “About a quarter of hospital admissions are still associated with medications not being taken correctly,” she said. “We don't want to get so narrowly focused on PA and interoperability and data connectivity without keeping that broader scope on the medication safety piece that employer groups and others are seeking.”
When Gonzalez closed the session by asking for a single change, whether in policy, technology or culture, that would most improve PAs for patients tomorrow, Amazon’s Patel didn’t hesitate. “When you're making decisions on behalf of your customer, imagine that customer is in the room and see if you would still make that same decision. If you wouldn't, you're not doing it right,” she said. “This is a simple culture change, but it’s not easy, and it can have a huge impact on the way you manage your business.”
The editorial staff had no role in this post's creation.