NCPDP SCRIPT Standard Supports Electronic Prior Authorization (Epa)

Created: January 2015

NCPDP SCRIPT Standard Supports Electronic Prior Authorization (ePA)

Fact Sheet

National Council for Prescription Drug Programs (NCPDP) is a not-for-profit American National Standards Institute (ANSI)-accredited Standards Development Organization consisting of more than 1,500 members who represent drug manufacturers, chain and independent pharmacies, drug wholesalers, insurers, mail order prescription drug companies, claims processors, pharmacy benefit managers, physician services organizations, prescription drug providers, software vendors, telecommunication vendors, service organizations, government agencies and other parties interested in electronic standardization within the pharmacy services sector of the health care industry.

I. What is Electronic Prior Authorization (ePA)?

Prior Authorization (PA) is the process that is used to request coverage of a specific medication for a specific patient. Generally, the prescriber requests the authorization from a “Payer” (health plan, processor, or Pharmacy Benefit Manager). The Payer determines whether it will pay for the medication based on a number of factors, such as medical necessity, prior treatment, clinical indications, and total cost of therapy. This process has historically been handled via facsimile exchange of information or telephone call, and only recently via payer-specific web portals. Electronic Prior Authorization (ePA) is the electronic transmission of information between the prescriber, and payer to determine whether or not the PA is granted. NCPDP has developed technical standards to support this electronic transmission and improve the timeliness of the exchange of information.

NCPDP ePA transactions are part of an approved, published NCPDP SCRIPT Standard for electronic prescribing. The industry has requested the Department of Health and Human Services (HHS) adopt the NCPDP SCRIPT Standard version 2013101 prior authorization transactions under the appropriate federal regulatory requirements.

The ePA transactions are built for the business case of PA between prescribers and payers for the pharmacy benefit (medications and supplies). The NCPDP ePA transactions are not used to conduct prior authorization for items covered under a medical benefit.

The standard supports the process of determining if a PA is needed, requesting and communicating PA approval, and appeals.

• The standard supports a method to convey a set of PA questions so that it can be presented logically in any system and the answers returned reliably.

• The standard supports features to minimize what the prescriber is asked, based on earlier answers or data in their Electronic Health Record (EHR) system, thus reducing the amount of time a prescriber/or staff spend reviewing and responding to the PA questions.

II. Challenges with Prior Authorization Today

Today, the prior authorization process involves prescribers, payers, pharmacists and patients in a cumbersome flow of information that may result in delays in treatment and dissatisfaction for all.

• Prescribers often are not aware that a PA is needed until the prescription claim is rejected at the pharmacy. This leads to delays in 1) the opportunity to discuss the PA process with the patient 2) the potential to prescribe another medication, and 3) the patient’s treatment beginning as anticipated.

• Pharmacists are often playing middlemen, contacting the prescriber to initiate a PA, and notifying the patient of the coverage restriction. They spend time contacting the prescriber, either by phone, fax or via a secure transaction. They may also contact the payer to determine the status of the PA request and update the patient.

• Patients may learn of the need for a PA when they attempt to obtain their medication. They are then faced with the choice of waiting for the PA process to be completed, paying the full price for their prescription or not obtaining the medication.

• For payers the current manual process may result in delays as data received via phone or fax cannot be systematically reviewed. As more processes are handled electronically, reverting to paper, phone, or fax for communication between payers and prescribers may cause delays.

III. Next Steps

The transition to the exchange of standardized electronic prior authorization information will require effort by all stakeholders. As the industry continues moving towards implementation, NCPDP offers the following for your consideration:

For legislators and regulators:

• Support the continued implementation of ePA and consider harmonization with federal timelines for ePA implementation in any state prior authorization legislation. Different ePA implementation timelines across states or between state and federal regulations may significantly challenge stakeholders operating in multiple states.

• NCPDP is working with HHS to support the adoption of the NCPDP SCRIPT Standard ePA transactions as the solution for all stakeholders to implement. More information on NCVHS’ recommendation to HHS is available at http://www.ncpdp.org/NCPDP/media/pdf/Final140515lt2.pdf

• Utilize NCPDP and industry stakeholders as a resource as you consider implementation of ePA.

For implementers (vendors, payers, and prescribers):

• Support the continued implementation of ePA and consider advocating harmonization with federal timelines for ePA implementation in any state prior authorization legislation. Different ePA implementation timelines across states or between state and federal regulations may significantly challenge stakeholders operating in multiple states.

• Determine if the solution will be developed internally or by a vendor.

• Develop and support customized questions based on the patient and the medication being requested.

• Use coded references to allow for systematic retrieval and population of data.

• Support the use of clinical attachments, such as subsets of the medical record, which can improve the prescriber’s workflow by reducing the amount of information that must be entered.

• Support the exchange and display of the prior authorization designation on the formulary and benefit files, which are named in regulation at http://www.cms.gov/Medicare/E-Health/Eprescribing/index.html?redirect=/eprescribing

For more information see www.ncpdp.org. Questions about this fact sheet can be sent to .