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What Is Selective Application of Prior Authorization and What Does It Mean to Stakeholders?

In this third in our six-part series on prior authorization (PA) in Canada vs the U.S. we address the selective application of PA.

In our first blog we provided an overview of the changing landscape of PA in the United States, specifically the 2018 American Consensus Statement on prior authorization. In our second blog we explored the role of transparency and communication in PA.

Another of the five areas of improvement identified in the Consensus Statement was an opportunity for the selective application of PA as a key opportunity to improve the PA experience and meet other obligations.

What does the selective application of PA mean?

Essentially, the payer relaxes their PA requirements for preapproved physicians when they prescribe medications that require PA. The payer may consider this when the physician has a track record of:

  • Ordering/prescribing patterns that adhere to evidence-based guidelines or other contractual terms.
  • Historically high prior authorization approval rates.

What are the benefits?

These programs can provide payers and plan sponsors with three big advantages:

  • Maintain ongoing cost management by requiring physicians to adhere to evidence-based guidelines, but targeting detailed PA claim requirements to where they are needed most.
  • Reduce the administrative burden on healthcare providers and payers, which helps manage administration costs.
  • Reduce time between prescribing and the patient’s access to medication.

Everyone wins, and the payer retains the right to audit any PA claim from a preferred physician. If the physician is audited and their prescribing does not comply with payer requirements, the payer can withdraw their selective application for the physician.

Why now is a good time to consider selective application of PA

The number of specialty drugs in the marketplace is growing and there are more in the pipeline. This places additional pressures on an already overburdened manual PA process and the stakeholders that work within the system. This can mean longer wait time for patients to receive approval for their prescribed medication.

Payers looking for opportunities to deliver a balance of claims control and administrative efficiencies for themselves, as well as other PA stakeholders, should consider implementing selective application for at least some medications and some prescribers.

State Legislation

Some states in the U.S. are already moving towards mandating selective application of PA through legislation. One example is what is known as gold carding. The new Texas House Bill 3459, also known as Texas Gold Card Act, which took effect October 2022, allows physicians who have a 90% PA approval rate over a six-month period on certain services to be exempt from PA requirements for those services. The purpose is to reduce physicians’ administrative burden associated with completing PA requests, while also encouraging adherence to evidence-based guidelines for prescribing.

The state of Michigan has also proposed a gold-carding program, outlined in Senate Bill 2471. The Bill promotes modification of certain PA requirements based on a health care professionals’ adherence to nationally recognized medical guidelines and has been in full effect since June 1, 2023.

Gold-carding is just one example of how selective application of prior authorization can be implemented.

The Canadian Context

Implementing selective application for some physicians would provide benefits in Canada as they do in the U.S. However, implementing selective application in Canada is challenging within the current paper-based PA process because the identification and monitoring of preferred physicians would need to be done manually. Electronic prior authorization (ePA) would make identifying and monitoring relatively straightforward.

Anyone who has been around the PA process in Canada can appreciate the manual, paper-based process has challenges for everyone:

  • Physicians and patient support (PSP) must coordinate claims documentation manually.
  • Patients’ wait time to access medication is longer because of the time needed to complete forms and medical documentation, and submit to insurers by mail or fax
  • Payers make a manual review and evaluation of claim documentation against their criteria and medical guidelines, then communicate decisions or requests for further information, which adds an administrative burden to payers
  • Everyone in the process is subject to wait times when communication is made manually, i.e., requests for or submission of further information, communication of approval, or denial by phone, mail, or fax.

Those insurers who are already implementing or working towards adopting electronic prior authorization (ePA) will be able to consider selective application of PA for some physicians in the future. This process improvement could reduce the administrative burden for physicians, PSPs, and payers, and the timeline for patients to start on their course of therapy.

Some of the considerations for a selective application program are likely to be:

  • Review and identification of physicians that meet qualification requirements over last 3 to 6 months, e.g., high approval rates, to be monitored on an ongoing basis
  • Signed agreement with physicians based on payer requirements
  • Development of expedited, short, PA claim forms, subject to audit
  • Identifying a list of selective PA medications
  • Using selective PA for some naïve patients prescribed PA medications and eligibility for those renewing.

Selective Application in Canada

Delivering cost management and managing the administrative burden for PA claims just makes good business sense. Using selective application will help patients receive timely access to the medications they need to stay or return to work, promote competitiveness and facilitate innovation.

Like workflow standards, selective application would benefit from an industry standard, as defined by the Standards Council of Canada. Simplify Prior Authorization is developing best practice standards and selective application will be considered. Look for more from the SPA initiative, including the release of the Best Practice Standards for Prior Authorization which are now in development.

If you would like to get involved in the SPA initiative and help us as we advocate for improvements in the PA process that will benefit all stakeholders, please contact us to discuss how your organization can get involved.

Look out for the next in our blog series on Canada vs U.S. prior authorization trends, an update on the development of the first Canadian Prior Authorization Best Practice Standards, and upcoming webinars on developments in prior authorization for your industry sector.

Please reach out to SPA and contact Denise Balch at info@simplifypriorauth.ca if you are interested in getting involved in the development of PA Practice Standards.

Thank you to Gold sponsors of the SPA initiative Amgen and Gilead, plus Silver sponsors AstraZeneca and Cencora/Innomar Strategies.

Stay connected

Our LinkedIn Page provides useful resources and information related to Prior Authorization with resources available for patients, benefits and healthcare stakeholders, follow our LinkedIn Page to stay up to date.

1Senate Bill 247 will also bring about progressive change to the PA process for insurers, requiring them to respond to non-urgent PA requests within 9 calendar days, and to urgent requests within 72 hours. Without a response within the prescribed time frame the request is considered granted. After May 31, 2024, insurers will be required to respond within 7 calendar days. More information about this Bill can be found here. We will also be addressing this in future SPA blogs.

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