CASE STUDY
Prior-authorization service
ar
CASE STUDY
Layar
Implementation of a comprehensive medication prior-authorization service Robert Leinss Jr., Todd Karpinski, and Binita Patel
T
he mapping of the human genome has contributed to the development of novel drugs that treat smaller populations with very specific health conditions. However, these medications tend to be very expensive because of the return on investment required for the innovator company to recoup the time and dollars invested in research and development. Such drugs are often referred to as specialty medications because of their high cost, special handling needs, and use in primarily chronic health conditions such as gastrointestinal (GI) conditions, rheumatic diseases, and multiple sclerosis. Spending on specialty medications is increasing at a rate of almost 20% annually and currently represents nearly 20% of plan costs.1 The use of these medications is predicted to continue growing at this rate for the foreseeable future. Specialty medications are predicted to represent 50% of health plan pharmacy costs by 2017.1 The pharmaceutical pipeline supports this growth.1 Problem Private and public insurers con-
Purpose. The development and successful implementation of a comprehensive medication prior-authorization service are described. Summary. At our 550-bed academic medical center, we found an increasing number of Medicare write-offs as a result of the off-label use of specialty medications. Furthermore, more insurers were requiring that prior authorization be attained before patients began treatment with a high-cost specialty medication. After investigating who was pursuing these prior authorizations and where they were documented, it became clear that no department within the hospital owned this responsibility. Our pharmacy department initiated a specialty medication prior-authorization and medication assistance program to review all medication orders written for high-cost specialty medications administered or infused in any of the health system’s outpatient clinics, including chemotherapy infusions. A full-time specialty pharmacy coordi-
tinue to decrease reimbursement to providers in an attempt to stretch limited healthcare dollars across a larger number of people. As a result of the passage of the Patient Protection and Affordable Care Act in 2010,
Robert Leinss Jr., B.S.Pharm., M.B.A., is Specialty Pharmacy Manager; Todd Karpinski, Pharm.D., M.S., FASHP, is Executive Director and Chief Pharmacy Officer; and Binita Patel, Pharm.D., is Director, Ambulatory Pharmacy, Froedtert Health, Milwaukee, WI. Address correspondence to Mr. Leinss (robert.leinss@ froedterthealth.org). The authors won an ASHP Best Practices Award in 2013 for the program described herein.
nator was hired in fall 2010. This pharmacist was responsible for spearheading the overall specialty medication strategy for the health system. Our prior-authorization work across our health system has not only helped to reduce Medicare write-offs and commercial insurance denials but also has resulted in closer working relationships with individuals in other departments of the hospital. Several million dollars in additional write-offs were avoided because our prior-authorization staff identified prescribed therapies that would not be covered by Medicare or commercial insurers before they were started. In total, we decreased write-offs or increased revenues by over $6.2 million during this time frame, a return on investment exceeding 20:1. Conclusion. A comprehensive medication prior-authorization service generated additional revenue due to a decrease in lost charges and an increase in net reimbursement. Am J Health-Syst Pharm. 2015; 72:159-63
healthcare began moving toward a system that rewards providers who produce positive outcomes at lower costs. 2 Consequently, traditional reimbursement has continued to decrease while providers and insurers
The authors have declared no potential conflicts of interest. Copyright © 2015, American Society of Health-System Pharmacists, Inc. All rights reserved. 1079-2082/15/0102-0159. DOI 10.2146/ajhp130786
Am J Health-Syst Pharm—Vol 72 Jan 15, 2015
159
CASE STUDY
Prior-authorization service
share in savings generated from more proactive, cost-effective patient care that improves outcomes at the same or lower cost. At our 550-bed academic medical center, we found an increasing number of Medicare write-offs (i.e., charges for a Medicare-covered patient that would normally be billed to Medicare but were not) as a result of the off-label use of specialty medications. Although Medicare provides clear guidelines for coverage, these guidelines were not being followed to allow for proper billing to and reimbursement from Medicare. A similar problem was identified with billing for patients with private, commercial insurance. More insurers were requiring that a predetermination, or prior authorization, be attained before patients began treatment with a high-cost specialty medication. After investigating who was pursuing these prior authorizations and where they were documented, it became clear that no department within the hospital owned this responsibility. Some clinics were pursuing prior authorizations for all orders, some were pursuing them only when they had time, and many were not pursuing prior authorizations at all. Analysis and resolution Program development. Although the pharmacy department neither ordered nor administered the specialty medications that were being written off, we felt fiscally responsible for the medications our department was preparing and providing our various clinics to administer to patients. With the support from our health system’s administration, the pharmacy department initiated a specialty medication prior-authorization and medication assistance program to review all medication orders written for high-cost specialty medications administered or infused in any of the health system’s outpatient clinics, including chemotherapy infusions. 160
A full-time specialty pharmacy coordinator was hired in fall 2010. This pharmacist was responsible for spearheading the overall specialty medication strategy for the health system. The first goal of the program was to reduce the volume of insurance denials and Medicare write-offs. This pharmacist met with various departments within the hospital to gain a better understanding of the billing and revenue processes used. Insurance denials and write-offs were then reviewed to determine the origin of the majority of medication orders that were being written off or denied. These write-offs and denials occurred primarily for outpatient infusion medications billed to medical insurance. Since Medicare provides clear coverage guidelines and does not require prior authorization for infused medications, initial efforts focused on reviewing all infusion orders, including those for chemotherapy, for Medicare-covered patients. We felt that this would allow us to make the greatest impact in the shortest amount of time. Our goal was to ensure that all infusion orders billed to Medicare were being used for a labeled indication. If a medication was ordered for an off-label use, we would review the medication’s local coverage determination (LCD), if one existed, or one of the other Medicare-approved compendia that indicates a “medically accepted” use. Implementation and experience. A full-time equivalent (FTE) Medicare billing and coding specialist was hired, as none of the pharmacy personnel had experience or training in these areas. The expertise this FTE brought to the program was invaluable and resulted in immediate and significant results. Many of the Medicare write-offs were due to the administration of high-cost specialty medications used to treat Crohn’s disease and ulcerative colitis. In the GI clinic, where most of these orders originated, prior authorizations
Am J Health-Syst Pharm—Vol 72 Jan 15, 2015
were done manually by a part-time insurance-verification specialist, with no documentation in the electronic medical record. Often, the prior authorization was not completed before the patient received the first infusion. Although the use of medications for off-label indications was minimal, the sheer volume of medications ordered by this clinic generated a significant number of writeoffs. For this reason, initial efforts were focused on GI clinic orders. After resolving the issues with prior authorizations for infusion orders originating from the GI clinic, the prior-authorization service was expanded to the rheumatology and neurology departments, where a number of specialty medications are ordered for patients with arthritis or multiple sclerosis. The increased volume of prior authorizations supported the hiring of another FTE to support our work in these new areas. The return on investment in FTEs who acquired prior authorizations was significant, resulting in almost immediate increased revenues and decreased write-offs. The next area of focus was the clinical cancer center, where most chemotherapy orders originate. The pharmacy prior-authorization staff began acquiring prior authorizations for commercial insurers as well as reviewing coverage for Medicare and Medicaid. Although the cancer center already had a nonpharmacy staff member handling prior authorizations for chemotherapy orders, we found that several ongoing chemotherapy regimens were not being covered by Medicare or the patient’s commercial insurer. Although it was difficult to see treatments continue when charges for these therapies were being written off or denied by insurers, it quickly became apparent that providers were unwilling to stop or change a chemotherapy regimen midcourse, regardless of insurance denials or Medicare noncoverage. However, many providers were will-
CASE STUDY
ing to review treatment markers earlier than they normally would have to determine if the therapy was having a positive therapeutic effect. In several cases, treatment regimens were stopped earlier than they would have been without our intervention when it was found that a treatment was not improving a patient’s condition. Once we began informing the providers about noncoverage issues before the start of treatments, providers were very open to recommending a different regimen that would be covered by the patient’s insurance. Our prior-authorization work across our health system has not only helped to reduce Medicare write-offs and commercial insurance denials but also has resulted in closer working relationships with individuals in other departments of the hospital. The prior-authorization and investigational drug services teams work closely with the clinical research division of our hospital’s compliance department to review the treatment groups in drug study protocols. We specifically review groups receiving the standard of care to ensure that the medications identified as commercially billable are indeed covered by insurers and Medicare. If our research indicates that Medicare or insurers will not cover the treatment, the study can be rejected or the sponsor can be asked to provide the medication before the hospital approves the study and begins enrolling patients. Our prior-authorization work also helped to uncover deficiencies in the billing reconciliation system. When examining Medicare writeoffs for cancer center patients, one Medicare patient was found to have a significant number of write-offs for paclitaxel. After further research, we found that the patient had commercial insurance that covered the chemotherapy regimen when it was initiated. The patient became Medicare eligible halfway through treatment, but because the chemotherapy
regimen did not meet Medicare coverage guidelines, the treatments were not being covered. This led us to implement a weekly report to identify patients whose insurance had changed and were currently receiving a high-cost drug treatment. This allowed us to review patients’ therapies to determine if a new prior authorization was required or if Medicare guidelines were being met for patients new to Medicare who were receiving complex drug therapies. Our reimbursement specialists successfully petitioned Medicare to reconsider and change several Medicare LCDs to expand coverage based on new clinical evidence. Our prior-authorization department acts as the central information gatherer, sending the requesting provider a letter template for submitting the LCD reconsideration request and gathering several published Phase II or III studies supporting the proposed off-label use. This information is then forwarded to the hospital’s corporate compliance department, which submits the request to the hospital’s Medicare fiscal intermediary. Examples of successful Medicare LCD reconsiderations include “the use of Pegfilgrastim outside of the 14 day before and 24 hour rule for patients that are on a dose dense chemotherapy regimen.” This request was approved and published in the July 2012 LCD update for filgrastim and pegfilgrastim. Another successful LCD reconsideration was for the use of infliximab “for Takayasu’s Arteritis for patients who have not responded to the standard therapies.” This was published in the July 2012 LCD update for infliximab. In the first six months of 2013, our staff recoded almost $4 million worth of Medicare claims that would have been written off had we not intervened to clarify and add the correct coding for these claims. In addition, several million dollars in additional write-offs were avoided because our prior-authorization staff
Prior-authorization service
identified prescribed therapies that would not be covered by Medicare or commercial insurers before they were started. In total, we decreased writeoffs or increased revenues by over $6.2 million during this time frame, a return on investment exceeding 20:1. Like many health systems, we have several outpatient pharmacies that serve the prescription medication needs of patients cared for in our clinics. In the summer of 2011, we conducted a one-month pilot study in the hospital’s cancer center to prove the value of having a specialist from our team handle prior authorizations for high-cost oral cancer specialty medications for patients who chose to have their prescriptions filled at one of our pharmacies. Over four weeks, we dispensed 59 additional prescriptions, generating almost $134,000 in additional gross prescription revenue. The effectiveness of the program allowed us to hire two additional staff members to focus on acquiring prior authorizations for the high-cost specialty prescriptions electronically sent to our retail outpatient pharmacies. We found that prior authorizations for these medications often required additional laboratory or clinical data before insurers would approve coverage. Having access to the patient’s electronic medical record allowed our staff to provide the information needed on behalf of the ordering physician’s clinic. This service incentivizes clinics to send prescriptions to our pharmacies, as it reduces the clinics’ workload. Also in summer 2011, the GI clinic in our hospital lost the services of a key nurse who managed all of the patients with hepatitis C who were being treated in the clinic. It was around this time that two new protease inhibitors for treating hepatitis C had come onto the market. The pharmacy department acted quickly by providing the services of a pharmacist who could electronically transcribe (based on physician order)
Am J Health-Syst Pharm—Vol 72 Jan 15, 2015
161
CASE STUDY
Prior-authorization service
these medication orders to one of our pharmacies and give our team the clinical data necessary to acquire the necessary prior authorizations. The pharmacist scheduled an appointment with these patients to provide education on the proper use and administration of these medications using the patient’s medication dispensed from our pharmacy. Preliminary results showed higher therapy completion rates (56.9% and 46.4% for system pharmacy and nonsystem pharmacy, respectively) and sustained virological response for patients managed by our pharmacies (95.7%) when compared with outside retail or specialty pharmacies (82.3%). Although there were several obstacles encountered during the development of the prior-authorization program, most were easily overcome with good communication and a consistently timely and efficient prior-authorization service. We learned that providers in general do not feel it is their responsibility to have a financial conversation with their patients about the coverage or noncoverage of certain regimens. During discussions with providers, we suggested that they at least make patients aware of the need to verify insurance coverage when proposing a specific therapeutic regimen. We suggested the use of a simple script, such as “This is the regimen we recommend for you and the stage of disease. We will check with your insurance to verify coverage and communicate our findings to you as soon as possible.” This information prepares patients for the possibility that they may have to self-pay for the prescribed therapy. In addition, it allows patients to make an informed decision, weighing the cost of therapy against the probability of a positive therapeutic outcome. This proactive approach improves patient satisfaction because patients are now aware of a bill they might receive for a noncovered service. 162
If a medication coverage review for a Medicare patient reveals that the treatment will not be covered by Medicare, the provider cannot bill Medicare unless the patient is notified upfront that the service will not be covered. Patients are notified using an advanced beneficiary notification of noncoverage (ABN). An ABN informs the patient that the treatment will not be covered by Medicare and projects the out-of-pocket charges of treatment. With a signed ABN, providers can bill Medicare for the service using a modifier code that indicates that the provider knows the service is not covered and that the patient has been informed and may be billed for the service. Medicare’s denial of the claim also allows the pharmacy to pursue replacement product from the manufacturer’s medication assistance program, if available. Most manufacturer assistance programs require at least one denial by Medicare or a commercial insurer before a patient is eligible to apply. While handling prior authorizations for various clinics, we discovered a number of other medication-related reimbursement and acquisition activities being performed on an ad hoc basis by clinic staff, primarily nurses. There was no consistency in the performance of these activities across different clinics. For example, in the GI clinic, the same individual who had been acquiring prior authorizations also managed the ordering of medications for patients who received products under a vendorsponsored medication assistance program. Infusion appointments were not tracked for these patients, often resulting in medication not being available when patients arrived for a scheduled infusion. In other cases, the pharmacy had excess amounts of specialty products in stock for patients who were no longer receiving the medication. Product was often sent by the medication assistance program suppliers without
Am J Health-Syst Pharm—Vol 72 Jan 15, 2015
verifying that the patient still had a current order, resulting in wasted product and unnecessary additional healthcare costs. After our prior-authorization staff began doing the prior authorizations for these clinics, they began tracking medication-assistance patient infusion appointments to ensure that the medication was in stock before the patient’s next scheduled infusion. Our efforts yielded immediate results. Products obtained through medication assistance programs stored in the pharmacy were managed more closely and products were in stock when needed, increasing patient compliance and satisfaction and eliminating unnecessary waste. The natural next step was to help enroll patients in a medication assistance program if they had no insurance or their insurance would not cover their therapy. Many programs require patients to financially qualify, but others simply require proof of an insurance denial. Patients find it difficult to navigate the complexity of the application forms needed to apply for assistance. Consequently, many of these patients go without their medication and end up in the emergency department or admitted to the hospital. With our help, patients were often able to obtain the medications they needed at no cost through the various assistance programs available. We now ask all self-pay patients to complete a limited power of attorney form that allows us to submit medication assistance applications on their behalf. This speeds up the process greatly, allowing us to obtain the medications patients need more quickly. Patients have been extremely thankful for our efforts and often send thank you letters to our staff, which increases our staff ’s job satisfaction. Our staff also help patients apply for copayment assistance programs. Although we originally pursued these for individuals with high deductibles,
CASE STUDY
large copayments, or high co-insurance costs, we quickly found that these programs were available for many of the high-cost medications on the market, regardless of insurance coverage. There is often no financial qualification so most patients qualify but are not aware that these programs are available. Because our area performs all of the prior authorizations and our work is centralized, we are able to offer these programs to anyone who is prescribed a medication that has one of these programs. In the process of helping patients get the medications they need at a price they can afford, we implemented another unique assistance program. Like many pharmacies, our pharmacies are a drop-off point for the disposal of medications that are outdated or no longer needed by a patient. The medications we receive are often in their original, unopened packaging. With a little research, we discovered that our state (Wisconsin) allows a pharmacy to accept and redispense medications that are in their original, unopened packaging if they were appropriately stored and have
not expired. Medication donors sign a form verifying that the medication they are donating has been stored appropriately and meets the above criteria. These medications can then be redispensed to patients without insurance for a small dispensing fee. This has led to a significant decline in the unnecessary destruction of usable medications while allowing patients with limited financial means to acquire the medications they need. This program provided over $250,000 (retail value) of medications at little or no charge to patients without insurance in the first year alone. It has the potential to grow significantly, since we have not yet begun marketing the service. The receipt, management, and dispensing of medications from our drug repository are done by the same individuals who do our priorauthorization work. Including the above mentioned $250,000 of the drug repository medications we dispensed, we acquired medication or copayment assistance totaling over $3.6 million for the 12 months ending June 2013.
Prior-authorization service
We are considering adding additional staff to separate the work performed by the current priorauthorization team into two distinct areas. One group will continue pursuing prior authorizations, and the other group will focus on helping patients apply for medication and copayment assistance, which is a longer, time-consuming process. We are also working to streamline our medication charity care programs across the health system’s hospitals to create one coordinated program for patients in need. Conclusion A comprehensive medication priorauthorization service generated additional revenue due to a decrease in lost charges and an increase in net reimbursement. References 1. Express Scripts. 2012 Drug trend report. http://lab.express-scripts.com/insights/ industry-updates/2012-drug-trend-report (accessed 2014 Oct 14). 2. Gosfield AG. Accountable care organizations versus accountable care: is there a difference? J Natl Compr Canc Netw. 2011; 9:587-9.
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163
Prior-authorization service
ar
CASE STUDY
Layar
Implementation of a comprehensive medication prior-authorization service Robert Leinss Jr., Todd Karpinski, and Binita Patel
T
he mapping of the human genome has contributed to the development of novel drugs that treat smaller populations with very specific health conditions. However, these medications tend to be very expensive because of the return on investment required for the innovator company to recoup the time and dollars invested in research and development. Such drugs are often referred to as specialty medications because of their high cost, special handling needs, and use in primarily chronic health conditions such as gastrointestinal (GI) conditions, rheumatic diseases, and multiple sclerosis. Spending on specialty medications is increasing at a rate of almost 20% annually and currently represents nearly 20% of plan costs.1 The use of these medications is predicted to continue growing at this rate for the foreseeable future. Specialty medications are predicted to represent 50% of health plan pharmacy costs by 2017.1 The pharmaceutical pipeline supports this growth.1 Problem Private and public insurers con-
Purpose. The development and successful implementation of a comprehensive medication prior-authorization service are described. Summary. At our 550-bed academic medical center, we found an increasing number of Medicare write-offs as a result of the off-label use of specialty medications. Furthermore, more insurers were requiring that prior authorization be attained before patients began treatment with a high-cost specialty medication. After investigating who was pursuing these prior authorizations and where they were documented, it became clear that no department within the hospital owned this responsibility. Our pharmacy department initiated a specialty medication prior-authorization and medication assistance program to review all medication orders written for high-cost specialty medications administered or infused in any of the health system’s outpatient clinics, including chemotherapy infusions. A full-time specialty pharmacy coordi-
tinue to decrease reimbursement to providers in an attempt to stretch limited healthcare dollars across a larger number of people. As a result of the passage of the Patient Protection and Affordable Care Act in 2010,
Robert Leinss Jr., B.S.Pharm., M.B.A., is Specialty Pharmacy Manager; Todd Karpinski, Pharm.D., M.S., FASHP, is Executive Director and Chief Pharmacy Officer; and Binita Patel, Pharm.D., is Director, Ambulatory Pharmacy, Froedtert Health, Milwaukee, WI. Address correspondence to Mr. Leinss (robert.leinss@ froedterthealth.org). The authors won an ASHP Best Practices Award in 2013 for the program described herein.
nator was hired in fall 2010. This pharmacist was responsible for spearheading the overall specialty medication strategy for the health system. Our prior-authorization work across our health system has not only helped to reduce Medicare write-offs and commercial insurance denials but also has resulted in closer working relationships with individuals in other departments of the hospital. Several million dollars in additional write-offs were avoided because our prior-authorization staff identified prescribed therapies that would not be covered by Medicare or commercial insurers before they were started. In total, we decreased write-offs or increased revenues by over $6.2 million during this time frame, a return on investment exceeding 20:1. Conclusion. A comprehensive medication prior-authorization service generated additional revenue due to a decrease in lost charges and an increase in net reimbursement. Am J Health-Syst Pharm. 2015; 72:159-63
healthcare began moving toward a system that rewards providers who produce positive outcomes at lower costs. 2 Consequently, traditional reimbursement has continued to decrease while providers and insurers
The authors have declared no potential conflicts of interest. Copyright © 2015, American Society of Health-System Pharmacists, Inc. All rights reserved. 1079-2082/15/0102-0159. DOI 10.2146/ajhp130786
Am J Health-Syst Pharm—Vol 72 Jan 15, 2015
159
CASE STUDY
Prior-authorization service
share in savings generated from more proactive, cost-effective patient care that improves outcomes at the same or lower cost. At our 550-bed academic medical center, we found an increasing number of Medicare write-offs (i.e., charges for a Medicare-covered patient that would normally be billed to Medicare but were not) as a result of the off-label use of specialty medications. Although Medicare provides clear guidelines for coverage, these guidelines were not being followed to allow for proper billing to and reimbursement from Medicare. A similar problem was identified with billing for patients with private, commercial insurance. More insurers were requiring that a predetermination, or prior authorization, be attained before patients began treatment with a high-cost specialty medication. After investigating who was pursuing these prior authorizations and where they were documented, it became clear that no department within the hospital owned this responsibility. Some clinics were pursuing prior authorizations for all orders, some were pursuing them only when they had time, and many were not pursuing prior authorizations at all. Analysis and resolution Program development. Although the pharmacy department neither ordered nor administered the specialty medications that were being written off, we felt fiscally responsible for the medications our department was preparing and providing our various clinics to administer to patients. With the support from our health system’s administration, the pharmacy department initiated a specialty medication prior-authorization and medication assistance program to review all medication orders written for high-cost specialty medications administered or infused in any of the health system’s outpatient clinics, including chemotherapy infusions. 160
A full-time specialty pharmacy coordinator was hired in fall 2010. This pharmacist was responsible for spearheading the overall specialty medication strategy for the health system. The first goal of the program was to reduce the volume of insurance denials and Medicare write-offs. This pharmacist met with various departments within the hospital to gain a better understanding of the billing and revenue processes used. Insurance denials and write-offs were then reviewed to determine the origin of the majority of medication orders that were being written off or denied. These write-offs and denials occurred primarily for outpatient infusion medications billed to medical insurance. Since Medicare provides clear coverage guidelines and does not require prior authorization for infused medications, initial efforts focused on reviewing all infusion orders, including those for chemotherapy, for Medicare-covered patients. We felt that this would allow us to make the greatest impact in the shortest amount of time. Our goal was to ensure that all infusion orders billed to Medicare were being used for a labeled indication. If a medication was ordered for an off-label use, we would review the medication’s local coverage determination (LCD), if one existed, or one of the other Medicare-approved compendia that indicates a “medically accepted” use. Implementation and experience. A full-time equivalent (FTE) Medicare billing and coding specialist was hired, as none of the pharmacy personnel had experience or training in these areas. The expertise this FTE brought to the program was invaluable and resulted in immediate and significant results. Many of the Medicare write-offs were due to the administration of high-cost specialty medications used to treat Crohn’s disease and ulcerative colitis. In the GI clinic, where most of these orders originated, prior authorizations
Am J Health-Syst Pharm—Vol 72 Jan 15, 2015
were done manually by a part-time insurance-verification specialist, with no documentation in the electronic medical record. Often, the prior authorization was not completed before the patient received the first infusion. Although the use of medications for off-label indications was minimal, the sheer volume of medications ordered by this clinic generated a significant number of writeoffs. For this reason, initial efforts were focused on GI clinic orders. After resolving the issues with prior authorizations for infusion orders originating from the GI clinic, the prior-authorization service was expanded to the rheumatology and neurology departments, where a number of specialty medications are ordered for patients with arthritis or multiple sclerosis. The increased volume of prior authorizations supported the hiring of another FTE to support our work in these new areas. The return on investment in FTEs who acquired prior authorizations was significant, resulting in almost immediate increased revenues and decreased write-offs. The next area of focus was the clinical cancer center, where most chemotherapy orders originate. The pharmacy prior-authorization staff began acquiring prior authorizations for commercial insurers as well as reviewing coverage for Medicare and Medicaid. Although the cancer center already had a nonpharmacy staff member handling prior authorizations for chemotherapy orders, we found that several ongoing chemotherapy regimens were not being covered by Medicare or the patient’s commercial insurer. Although it was difficult to see treatments continue when charges for these therapies were being written off or denied by insurers, it quickly became apparent that providers were unwilling to stop or change a chemotherapy regimen midcourse, regardless of insurance denials or Medicare noncoverage. However, many providers were will-
CASE STUDY
ing to review treatment markers earlier than they normally would have to determine if the therapy was having a positive therapeutic effect. In several cases, treatment regimens were stopped earlier than they would have been without our intervention when it was found that a treatment was not improving a patient’s condition. Once we began informing the providers about noncoverage issues before the start of treatments, providers were very open to recommending a different regimen that would be covered by the patient’s insurance. Our prior-authorization work across our health system has not only helped to reduce Medicare write-offs and commercial insurance denials but also has resulted in closer working relationships with individuals in other departments of the hospital. The prior-authorization and investigational drug services teams work closely with the clinical research division of our hospital’s compliance department to review the treatment groups in drug study protocols. We specifically review groups receiving the standard of care to ensure that the medications identified as commercially billable are indeed covered by insurers and Medicare. If our research indicates that Medicare or insurers will not cover the treatment, the study can be rejected or the sponsor can be asked to provide the medication before the hospital approves the study and begins enrolling patients. Our prior-authorization work also helped to uncover deficiencies in the billing reconciliation system. When examining Medicare writeoffs for cancer center patients, one Medicare patient was found to have a significant number of write-offs for paclitaxel. After further research, we found that the patient had commercial insurance that covered the chemotherapy regimen when it was initiated. The patient became Medicare eligible halfway through treatment, but because the chemotherapy
regimen did not meet Medicare coverage guidelines, the treatments were not being covered. This led us to implement a weekly report to identify patients whose insurance had changed and were currently receiving a high-cost drug treatment. This allowed us to review patients’ therapies to determine if a new prior authorization was required or if Medicare guidelines were being met for patients new to Medicare who were receiving complex drug therapies. Our reimbursement specialists successfully petitioned Medicare to reconsider and change several Medicare LCDs to expand coverage based on new clinical evidence. Our prior-authorization department acts as the central information gatherer, sending the requesting provider a letter template for submitting the LCD reconsideration request and gathering several published Phase II or III studies supporting the proposed off-label use. This information is then forwarded to the hospital’s corporate compliance department, which submits the request to the hospital’s Medicare fiscal intermediary. Examples of successful Medicare LCD reconsiderations include “the use of Pegfilgrastim outside of the 14 day before and 24 hour rule for patients that are on a dose dense chemotherapy regimen.” This request was approved and published in the July 2012 LCD update for filgrastim and pegfilgrastim. Another successful LCD reconsideration was for the use of infliximab “for Takayasu’s Arteritis for patients who have not responded to the standard therapies.” This was published in the July 2012 LCD update for infliximab. In the first six months of 2013, our staff recoded almost $4 million worth of Medicare claims that would have been written off had we not intervened to clarify and add the correct coding for these claims. In addition, several million dollars in additional write-offs were avoided because our prior-authorization staff
Prior-authorization service
identified prescribed therapies that would not be covered by Medicare or commercial insurers before they were started. In total, we decreased writeoffs or increased revenues by over $6.2 million during this time frame, a return on investment exceeding 20:1. Like many health systems, we have several outpatient pharmacies that serve the prescription medication needs of patients cared for in our clinics. In the summer of 2011, we conducted a one-month pilot study in the hospital’s cancer center to prove the value of having a specialist from our team handle prior authorizations for high-cost oral cancer specialty medications for patients who chose to have their prescriptions filled at one of our pharmacies. Over four weeks, we dispensed 59 additional prescriptions, generating almost $134,000 in additional gross prescription revenue. The effectiveness of the program allowed us to hire two additional staff members to focus on acquiring prior authorizations for the high-cost specialty prescriptions electronically sent to our retail outpatient pharmacies. We found that prior authorizations for these medications often required additional laboratory or clinical data before insurers would approve coverage. Having access to the patient’s electronic medical record allowed our staff to provide the information needed on behalf of the ordering physician’s clinic. This service incentivizes clinics to send prescriptions to our pharmacies, as it reduces the clinics’ workload. Also in summer 2011, the GI clinic in our hospital lost the services of a key nurse who managed all of the patients with hepatitis C who were being treated in the clinic. It was around this time that two new protease inhibitors for treating hepatitis C had come onto the market. The pharmacy department acted quickly by providing the services of a pharmacist who could electronically transcribe (based on physician order)
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CASE STUDY
Prior-authorization service
these medication orders to one of our pharmacies and give our team the clinical data necessary to acquire the necessary prior authorizations. The pharmacist scheduled an appointment with these patients to provide education on the proper use and administration of these medications using the patient’s medication dispensed from our pharmacy. Preliminary results showed higher therapy completion rates (56.9% and 46.4% for system pharmacy and nonsystem pharmacy, respectively) and sustained virological response for patients managed by our pharmacies (95.7%) when compared with outside retail or specialty pharmacies (82.3%). Although there were several obstacles encountered during the development of the prior-authorization program, most were easily overcome with good communication and a consistently timely and efficient prior-authorization service. We learned that providers in general do not feel it is their responsibility to have a financial conversation with their patients about the coverage or noncoverage of certain regimens. During discussions with providers, we suggested that they at least make patients aware of the need to verify insurance coverage when proposing a specific therapeutic regimen. We suggested the use of a simple script, such as “This is the regimen we recommend for you and the stage of disease. We will check with your insurance to verify coverage and communicate our findings to you as soon as possible.” This information prepares patients for the possibility that they may have to self-pay for the prescribed therapy. In addition, it allows patients to make an informed decision, weighing the cost of therapy against the probability of a positive therapeutic outcome. This proactive approach improves patient satisfaction because patients are now aware of a bill they might receive for a noncovered service. 162
If a medication coverage review for a Medicare patient reveals that the treatment will not be covered by Medicare, the provider cannot bill Medicare unless the patient is notified upfront that the service will not be covered. Patients are notified using an advanced beneficiary notification of noncoverage (ABN). An ABN informs the patient that the treatment will not be covered by Medicare and projects the out-of-pocket charges of treatment. With a signed ABN, providers can bill Medicare for the service using a modifier code that indicates that the provider knows the service is not covered and that the patient has been informed and may be billed for the service. Medicare’s denial of the claim also allows the pharmacy to pursue replacement product from the manufacturer’s medication assistance program, if available. Most manufacturer assistance programs require at least one denial by Medicare or a commercial insurer before a patient is eligible to apply. While handling prior authorizations for various clinics, we discovered a number of other medication-related reimbursement and acquisition activities being performed on an ad hoc basis by clinic staff, primarily nurses. There was no consistency in the performance of these activities across different clinics. For example, in the GI clinic, the same individual who had been acquiring prior authorizations also managed the ordering of medications for patients who received products under a vendorsponsored medication assistance program. Infusion appointments were not tracked for these patients, often resulting in medication not being available when patients arrived for a scheduled infusion. In other cases, the pharmacy had excess amounts of specialty products in stock for patients who were no longer receiving the medication. Product was often sent by the medication assistance program suppliers without
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verifying that the patient still had a current order, resulting in wasted product and unnecessary additional healthcare costs. After our prior-authorization staff began doing the prior authorizations for these clinics, they began tracking medication-assistance patient infusion appointments to ensure that the medication was in stock before the patient’s next scheduled infusion. Our efforts yielded immediate results. Products obtained through medication assistance programs stored in the pharmacy were managed more closely and products were in stock when needed, increasing patient compliance and satisfaction and eliminating unnecessary waste. The natural next step was to help enroll patients in a medication assistance program if they had no insurance or their insurance would not cover their therapy. Many programs require patients to financially qualify, but others simply require proof of an insurance denial. Patients find it difficult to navigate the complexity of the application forms needed to apply for assistance. Consequently, many of these patients go without their medication and end up in the emergency department or admitted to the hospital. With our help, patients were often able to obtain the medications they needed at no cost through the various assistance programs available. We now ask all self-pay patients to complete a limited power of attorney form that allows us to submit medication assistance applications on their behalf. This speeds up the process greatly, allowing us to obtain the medications patients need more quickly. Patients have been extremely thankful for our efforts and often send thank you letters to our staff, which increases our staff ’s job satisfaction. Our staff also help patients apply for copayment assistance programs. Although we originally pursued these for individuals with high deductibles,
CASE STUDY
large copayments, or high co-insurance costs, we quickly found that these programs were available for many of the high-cost medications on the market, regardless of insurance coverage. There is often no financial qualification so most patients qualify but are not aware that these programs are available. Because our area performs all of the prior authorizations and our work is centralized, we are able to offer these programs to anyone who is prescribed a medication that has one of these programs. In the process of helping patients get the medications they need at a price they can afford, we implemented another unique assistance program. Like many pharmacies, our pharmacies are a drop-off point for the disposal of medications that are outdated or no longer needed by a patient. The medications we receive are often in their original, unopened packaging. With a little research, we discovered that our state (Wisconsin) allows a pharmacy to accept and redispense medications that are in their original, unopened packaging if they were appropriately stored and have
not expired. Medication donors sign a form verifying that the medication they are donating has been stored appropriately and meets the above criteria. These medications can then be redispensed to patients without insurance for a small dispensing fee. This has led to a significant decline in the unnecessary destruction of usable medications while allowing patients with limited financial means to acquire the medications they need. This program provided over $250,000 (retail value) of medications at little or no charge to patients without insurance in the first year alone. It has the potential to grow significantly, since we have not yet begun marketing the service. The receipt, management, and dispensing of medications from our drug repository are done by the same individuals who do our priorauthorization work. Including the above mentioned $250,000 of the drug repository medications we dispensed, we acquired medication or copayment assistance totaling over $3.6 million for the 12 months ending June 2013.
Prior-authorization service
We are considering adding additional staff to separate the work performed by the current priorauthorization team into two distinct areas. One group will continue pursuing prior authorizations, and the other group will focus on helping patients apply for medication and copayment assistance, which is a longer, time-consuming process. We are also working to streamline our medication charity care programs across the health system’s hospitals to create one coordinated program for patients in need. Conclusion A comprehensive medication priorauthorization service generated additional revenue due to a decrease in lost charges and an increase in net reimbursement. References 1. Express Scripts. 2012 Drug trend report. http://lab.express-scripts.com/insights/ industry-updates/2012-drug-trend-report (accessed 2014 Oct 14). 2. Gosfield AG. Accountable care organizations versus accountable care: is there a difference? J Natl Compr Canc Netw. 2011; 9:587-9.
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