PRECISIONvalue’s Barbara Henry points out that while DUMs are a vital cost-savings tool, the administrative burden can be extremely high. In this overview, she offers some new strategies to minimize the administrative impact while still controlling cost.

CMS’s Current and Proposed Actions to Bend the Prescription Drug Cost Curve

Rising costs and affordability are leading concerns of all US healthcare system stakeholders.  Such concerns are likely to drive tighter cost management and increased expectations of outcomes from managed care organizations’ access decision-makers. Drug utilization management (DUM) has long been an integral part of the healthcare delivery system as a trusted cost-savings tool. It’s not a perfect process. Undoubtedly, the viability of the US healthcare system requires ongoing adaptation, and the DUM process needs to evolve. While, by definition, a DUM program drives cost savings for payers, it also has many unintended consequences.

Most of the prior authorization (PA) process is still done manually, according to the Council for Affordable Quality Healthcare, Inc. (CAQH), a nonprofit alliance of health organizations. Only 1 in 4 PA requests (26%) are handled fully electronically, according to the 2021 CAQH Index.¹ Furthermore, an American Medical Association survey of 1,000 practicing physicians found that 86% described the administrative burden associated with PA as “high or extremely high,” and 88% said the burden has increased in the last 5 years. Estimates show PAs increasing 14% year-over-year and up 27% from the index in 2016. Of note, the survey is not limited to medication PA but 82% reported that PA can at least sometimes lead to treatment abandonment.² As the administrative burden of the PA process continues to increase, so does the need to manage the increasing challenges in delivering care.

The administrative burden created by drug utilization programs, if reduced, could result in secondary cost savings for payers and health systems. As these programs become more restrictive, there is a need to maximize technology to improve efficiency, decrease administrative burden, and improve appropriate medication access. While artificial intelligence (AI), real-time benefit tools, and electronic medical record (EMR) integration are starting to find their way into the backbone of programs, their potential is far from maximized.

On the positive side, electronic PA is widely available, EMRs exist, AI is being leveraged, and federal regulations are pushing the healthcare industry to move toward interoperability. Still, the technology is simply not where it needs to be. However, there are examples of PBMs investing in process improvements. Express Scripts is building a smarter PA system that investigates claims data to answer some PA questions before sending the requests for information to physicians.³ Additionally, all the larger PBMs also offer real-time benefit tools with functionality within EMRs. At the time of e-prescribing, these tools provide patient cost-share; coverage information, including details regarding PA and step therapy requirements; and alternative drug options when appropriate. Adoption of these tools has been slow and complicated because they are not universally accessible, but instead are unique to each pharmacy benefit manager (PBM).

Additionally, AI and electronic algorithms can improve efficiencies but cannot provide everything humans can in the process and, for now, 100% automation is not realistic. Translating complex coverage criteria into a format that is appropriately captured within electronic systems—allowing complete end-to-end automation—remains a challenge. There is a need for interoperability and health system infrastructure improvements to address the administrative burden and improve patient access.

Commercial payers and PBMs are under increasing financial pressure to deliver profit margins to stakeholders and to provide quality, affordable benefits to employers at a time when talent recruitment and retention are of the utmost importance. Manufacturers can play a role in linking the available payer technology to improve prescriber understanding and education and improve access to their products. Speaking with payers to understand which systems they use and how criteria for their products translate from a written policy to an electronic process system can help facilitate conversations with providers and improve the processing of a PA. There is no lack of vendors offering automation solutions. The healthcare system is complex and needs to be streamlined. All stakeholders involved in the system can play a role in adopting and utilizing automation.

References:

1. Chief Healthcare Executive™. Steps to smarter prior authorization. Accessed May 15, 2022. https://s3.lightboxcdn.com/vendors/7a2140ce-78bb-4521-81e3-ce42907b9cd0/uploads/c5667c84-8442-434b-9299-f4b4bb0d6c53/ChangeHealthcareCHEeBookCHA21CED0127FinalApproved.pdf
2. Robeznieks A. 1 in 4 doctors say prior authorization has led to a serious adverse event. American Medical Association. February 5, 2019. Accessed May 15, 2022. https://www.ama-assn.org/practice-management/sustainability/1-4-doctors-say-prior-authorization-has-led-serious-adverse
3. Nowak L. What’s next for electronic prior authorization? Express Scripts. July 16, 2018. Accessed May 15, 2022. https://www.express-scripts.com/corporate/articles/whats-next-electronic-prior-authorization

**This article was included in the May Issue of Precision’s All Access Newsletter which features exclusive insights on drug utilization management from our team of former payer and IDN decision makers. Click here to subscribe and access this month’s complete issue, as well as be the first to receive next months issue.