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A doctor processing electronic forms as part of an efficient healthcare process
A doctor processing electronic forms as part of an efficient healthcare process

Efficiency: Prior Authorization and the Value of an Electronic Claims Process (ePA)

In the last of our six-part series examining prior authorization (PA) in Canada vs. the U.S., we explore what is driving the need for electronic prior authorization (ePA) and how ePA improves the claims process and is more cost effective and efficient than the current manual process. You can read the other blogs in this series here.

The claims process for PA of mostly specialty drugs is time consuming for all stakeholders involved (patients, physicians, patient support programs, and insurers), primarily because it is paper based, unlike non specialty drugs. There has been growing pressure in the U.S. and more recently in Canada for payers, mostly insurers and third-party payers like pharmacy benefit managers, to make changes to improve the efficiency and transparency of PA, including a move to ePA. This would impact mostly specialty drugs over $10,000 annually per patient.

What exactly is ePA? It is the preparation and submission of PA claims electronically, and eventually the electronic adjudication of some PA claims.

The Benefits of ePA. The adoption of ePA streamlines the claims process resulting in a net benefit of time and money to all stakeholders based on:

  • A single online platform for the preparation and submission of PA claims. This reduces the time spent by physicians and patient support programs (PSPs) to complete claim forms, gather signatures, and attach medical records. Because of flags in the system, it also reduces the incidence of missing, or illegible information.
  • Secure electronic submission of the completed claim form and medical records to payers. This reduces the chances of lost claim forms, misfiled claims, or claims that are never received or documents that are separated from attachments through the current fax and mail process.
  • Reduced time for data input and review. When physicians save time through ePA, they can see more patients. Payers receive claims more quickly than through the mail or fax, and there is no need for insurers to repeat data entry, which saves time and reduces clerical errors.
  • Financial benefits. When PSPs and payers save time, they become more efficient, and they save money. Savings for payers mean savings for clients.
  • Patients receive a response more quickly. Payers can review and respond to patients more quickly with a reimbursement decision. Patients can therefore access approved medication more quickly improving return to work and presenteeism.

ePA is an integral part of larger improvements in the PA process that are needed in Canada which include better communication and administration processes as well as the efficiencies ePA can deliver.

In the U.S.

There has been strong advocacy in the U.S. for prior authorization reform. Numerous U.S. healthcare associations worked together to release the 2018 Consensus Statement on Improving the Prior Authorization Process. The American Medical Association has also been active through their Fix Prior Authorization campaign.

According to the American Medication Association: “In 2023, nine states and the District of Columbia pass legislation that reforms the PA process in their jurisdictions, and the momentum to make changes to cumbersome process continues to build this year [2024].” As of January 2024, the AMA reports that more than 90 bills across 30 states have been introduced in legislatures on comprehensive prior authorization reform.  

In addition to process changes, some states require the implementation of an ePA platform which accepts and responds electronically to PA claims through an Application Programming Interface (API). An API is the tool used for two pieces of software to communicate with each other.

The U.S. public sector is also on board with ePA. The U.S. Centers for Medicare and Medicaid Services, CMS, finalized a ruling in early 2024 that will implement PA reforms including the implementation of ePA. The CMS rule will also require insurers to provide very specific denial reasons and public reporting of metrics around approval and denial numbers, and processing time.

The Need for Reform and Automation in Canada – A Heavy Burden

The increasing number of specialty drugs and the number of drugs subject to PA is placing a heavy burden on all stakeholders. Industry experts believe that today there are roughly 500 specialty drug indications subject to prior authorization in Canada, and there is more innovation in the specialty drug space according to the Express Scripts Canada 2023 Drug Trend Report. This will place additional administrative and time pressure on PA stakeholders.

There has been some, but very little progress towards ePA adoption and other process improvements in the Canadian private sector. In the Canadian public sector, Ontario and British Columbia have already changed their public PA processes and seen positive results.

In Ontario, The Special Authorization Digital Information Exchange (SADIE) was implemented in 2019, including ePA. Some of the benefits from SADIE include real time decisions and online tracking of submissions, faster decision times, better communication between stakeholders, and better accuracy:

  • Up to 50% faster decision time 
  • Decisions for EAP for many drug requests within seconds of submissions
  • Up to 75% fewer requests for missing information
  • Online tracking and access to historical EAP submissions and responses
  • Easily accessible criteria information 
  • Criteria driven “smart forms” that only ask the questions needed for the request.

In British Columbia, the Special Authority Program (SAP) launched in 2021. It includes ePA submission and some auto adjudication. It also includes digital notification of adjudication decisions to patients and prescribers, preferred prescribers who are exempt from submitting a special authorization request for some drugs, and the ability of patients to view their claim status. BC has seen benefits that include:

  • Quicker turn around time, some requests are approved within hours
  • Less back and forth with the special authorization team because accuracy is improved.

It is in the best interests of all stakeholders that Canada’s private payers prioritize improvements in the PA process, including the implementation of ePA. Without change, the PA experience will miss the opportunity to realize efficiencies that will benefit patients’ health outcomes, reduce administration time for all stakeholders, and save money.

What’s New in 2024

You will see more blogs and podcasts that will provide you with insights into PA and the Framework and Accreditation program that is in development for payers. PA stakeholders are encouraged to support the Prior Authorization Framework and Accreditation (PAFA) program launching in 2024 as a member of associate member. Details will follow soon. PAFA provides tangible metrics as a guide to payers for improving PA. Payers who are members will be able to identify opportunities for efficiencies in their process, conduct self evaluations, and apply for accreditation. Achieving accreditation will demonstrate their commitment to improvements in the claims process and experience for all PA stakeholders and realize the benefits.

For more information on Simplify Prior Authorization or sponsorship, or for inquiries about PAFA membership, associate membership, and accreditation contact info@simplifypriorauth.ca.


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