An Oscar-Winning Health Reform Idea: Electronic Prior Authorization

  • by: |
  • 12/04/2013

According to the American Medical Association, cost estimates of inefficient health care claims processing, payment and reconciliation are between $21 and $210 billion. In the physician practice, the claims management revenue cycle consumes an unsustainable 10–14 percent of practice revenue.

The current system is all too often manual. It must be replaced by automated, transparent, unambiguous, real-time health care transactions.

The full AMA white paper on this issue can be found here.

A new article by Robert Oscar, RPh,President and CEO of RxEOB, furthers that argument. According to Oscar:

Prior authorization (PA) is a complex process that is often daunting and monotonous for medical practice managers. It is also costly in terms of economics and human life, in particular when PA requirements lead to patient medication needs “falling through the cracks,” as some patients abandon their prescriptions due to the confusion and delay of the approval process.

Some other important points from Oscar:

The original goal of PA was to save money, requiring physicians to justify to health plans the need for medications, diagnostic tests and procedures, but it has led to pharmacists having to spend an average of five hours per week handling PA requests. This is non-reimbursable time that is better served on direct patient care.

A nationwide physician survey indicates that more than 69 percent of physicians typically wait several days to receive a PA from an insurer for a prescribed drug, while 10 percent wait more than a week. While more than 52 percent of office-based prescribers utilize electronic prescribing methods, most of them continue to use paper-based methods for obtaining PA of medications from health plans, causing unnecessary delays for patients.

The good news is that a growing number of physicians and office managers are taking proactive steps to solve these issues by taking advantage of electronic PA (ePA), a technology that enables them to submit an authorization request through hand-held devices or via a web portal prior to pharmacy adjudication.

ePA speeds up health insurer response time, minimizes resources associated with manual processes, and helps to enhance the quality and utility of the PA process.

For physicians and office practice managers who want to reduce manual PA workflow, improve the quality of the PA enforcement process, automatically document all activities, reduce the PA approval response time, and increase their understanding of lower-cost therapeutic alternatives, ePA technology is the way to go. The best solution can enable physicians and their staff assistants to submit the PA request online via EMR or e-prescribing workflow, thereby mitigating unnecessary delays, improving the quality of patient care and enhancing the patient’s overall experience with care delivery process.  

Oscar’s complete analysis can be found here.


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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