What is Prior authorization?

Ever been to the pharmacy and the pharmacist or technician says, “Sorry, your insurance is not allowing this medication for you right now.” What does this mean and what specific questions should you ask the pharmacist or technician.

Please ask, “Why, is this a prior authorization issue?”

Prior authorization is a restriction made by the insurance company requiring a doctor to submit a special request to the insurance company for the patient to receive a certain medication. In the United states, the price of medication is determined by the pharmaceutical company, and can be quite expensive. We hope for the patient’s insurance company to cover the cost of this medication, but it sometimes isn’t full coverage and the patient still has to pay for some of the cost. 

In Dr. Datta’s practice, however, he has HIPAA trained staff to help him obtain prior authorization. This results in Dr. Datta being able to provide the best current medications for his patients in a timely manner. It results in the patients receiving the best and most appropriate medication efficiently. This is ideally how the outpatient practice should operate. 

Patients often receive health insurance from:

• Their employer
• Privately- Blue Cross Blue Shield, Aetna, United healthcare
  • EPO and PPO usually have better coverage
  • HMOs have less coverage
• Obamacare – affordable insurance
• Medicare/Medicaid – often has significant coverage for medications but these patients can’t see out of network providers since Medicaid and Medicare wants patients to see in-network doctors. 
• There are many other insurance plans too.

Usually, every year the insurance companies require prior authorizations on more medications and certain medications become formulary. This is because the price of medications is becoming more expensive. The insurance company does not want to pay for full coverage of the medication unless the patient really needs it. The doctor has to complete this prior authorization process with the insurance company by submitting a report that makes a case for why the patient needs a particular medication. For doctors, it’s tough to find the time to do this. Unfortunately, in some circumstances, even if the patient truly needs that medication, the prior authorization is not accepted. In those cases, an appeal must be filed by the doctor. Notice, I’m not writing that it’s the doctor’s office that does the prior authorization. It’s the doctors themselves, which is a huge rate limiting factor. Then the insurance company has to approve that request. 

For example, Rexulti and Vraylar are relatively newer atypical antipsychotic medications which are expensive. Rexulti is the new and improved Abilify. Vraylar not only treats schizophrenia, but bipolar disorder and depression as well. When the doctor chooses to prescribe Rexulti for a patient, the insurance company has to pay for the medication. This is because the cost of the medication may be something like $500 per month and that might be too high for a patient to pay again and again. It’s the pharmaceutical company who sets this price. Sometimes, the patient’s insurance company doesn’t want to cover the cost of this medication every month. As a result, the insurance company wants the doctor to make the case (prior auth) for this patient. For Rexulti, the prior auth case would have to answer:

1. What generic medications has the patient tried and failed in the past year? Has the patient tried and failed Abilify, Seroquel, Risperdal? What was the duration of the medication trial?
2. Has the patient experienced side effects to other atypical antipsychotic medication?

It has become very difficult for inpatient and outpatient doctors to complete prior authorization for their patients. Unless they have an assistant completing it.  Doctors have a lot of patients to see through the duration of the day, sometimes up to 10 patients, 30-45 minutes sessions each. The doctor does not have time to complete this prior authorization for every patient. The pharmaceutical company establishes the price of the medication. The insurance company has made it medically and legally valid to ask the doctor/medical office to complete prior authorization. However, in reality, it makes it more difficult for doctors to obtain the medication their patient needs.

Here is a hypothetical real life scenario:

The patient tried Abilify and Seroquel in the past with poor results. Abilify was not strong enough for the patient and Seroquel made the patient gain weight, it increased their blood sugar and increased blood cholesterol. The doctor recommends Rexulti for bipolar disorder and depression. Why not give one medication to treat both issues? Sounds good right? The less medications, the less side effects there are. Sounds like a win-win, right? The patient goes to the pharmacy, and the pharmacist says that Rexulti costs $500. 

The patient should ask the pharmacist, is this a prior authorization issue? Then, the pharmacist should fax the doctor to ask for prior authorization for this prescription. That fax contains the patient’s demographic information (name, address, insurance ID), the name of the insurance company along with the insurance company’s  phone number that needs to be called to obtain prior authorization. It helps if the patient also calls the doctor and leaves a voicemail/message reporting that Rexulti needs prior authorization. 

It can be a long process. Sometimes the doctor needs to remain on the phone for 30 minutes, when in reality no doctor actually has this much time to spend waiting on the phone. Cover My Meds is a website that attempts to make the prior authorization process simpler for doctors. However, many prior authorizations through Cover My Meds get denied, and the doctor has to submit for an appeal with some of the patients’ chart notes. This is another technique by the insurance company to make it difficult for the doctor to obtain prior authorization for the patient. What ends up happening is the doctor is never able to complete prior authorization due to denials and appeals. The patient is never able to get Rexulti and has to remain on the cheaper Abilify or Seroquel, despite the side effects.

The solution: within a hospital the medical or inpatient psychiatric ward has multiple staff. There is usually a separate staff member (or assistant) who talks to the insurance company to obtain prior authorization. This is why sometimes when the doctor is working on the inpatient floor, they’ll get a phone call from the staff member asking for a peer-to-peer review. That’s when a MD/DO physician from the insurance company talks to the inpatient MD/DO regarding why the patient needs this medication. This can also be done in the outpatient clinic. However, most outpatient clinics have not hired a specific staff member to complete prior authorizations. This degree of difficulty in obtaining prior authorization is difficult for the doctor and in turn difficult for patients who are delayed in receiving their medications.  

It is a full-time job for one dedicated staff member to obtain prior authorization for a handful of doctors within an outpatient clinic. An efficient hospital system could employ one staff member to help obtain prior authorizations for both the inpatient and outpatient units. This is actually done most commonly in the inpatient hospital ward that offers drug rehabilitation treatment. These sophisticated inpatient detox and rehab wards have an intake department or office with staff who will see if the patient’s insurance will cover a 7, 14, 21 or 28 day stay. The staff member must determine the length of stay based on the patient’s insurance or else that floor of the hospital will not get paid for the patient’s 14-day rehab stay. These teams are also able to obtain prior authorization for certain medications. If the hospital hires another person on that team, that person can take care of prior authorizations for the outpatient clinic.

In conclusion, prior authorization is a legal technique that insurance companies use to get a doctor’s approval for a patient’s expensive medication. The patient, pharmacy and the doctor need to work together as a team to obtain the correct phone number for prior auth and get this done together as a team. 

In Dr. Datta’s practice, however, he has HIPAA trained staff to help him obtain prior authorization. This results in Dr. Datta being able to provide the best current medications for his patients in a timely manner. It results in the patients receiving the best and most appropriate medication efficiently. This is ideally how the outpatient practice should operate.