Why Prior Authorization is critical in Specialty Pharmacy Billing Services

Specialty pharmacies provide medications for the treatment of chronic diseases. There are various complexities in the reimbursement process for these pharmacies. One of these complexities is prior authorization, which refers to the process of securing approvals from payers before a medical service or medication. Specialty pharmacists face obstacles in the reimbursement process which hinders their progress, creates claim denials, and results in loss of revenue. With the developmental progress in pharmaceutical research and development, prior authorization became an important component in the specialty pharmacy billing services. The Managed Care Organizations (MCOs) use prior authorization to determine which medications qualify for reimbursement.

Prior authorization plays an important role in every healthcare billing service. The evolving healthcare regulations continue to impact specialty pharmacy billing processes. Specialty pharmacies are increasingly outsourcing billing operations to professional billing companies to ensure that prior authorization and other billing procedures are taken care of.

The different kinds of specialty pharmacy medications that require prior authorization

Specialty pharmacies deal with those specialty medications or drugs that are more complex in nature and expensive than ordinary ones. These pharmacies also provide dedicated healthcare services like injections and specialized medication management. Specialty pharmacies are involved with the use of expensive medications like injectables or oral medications. These medications are mostly used for the treatment of chronic diseases like rheumatoid arthritis, HIV, and cancer.

Types of medications which require prior authorization:

• Cost-effective medications used to treat long-term conditions like cancer
• Branded medications which are cost-effective
• Medications used at higher dosages than standard ones
• Medications that are considered as medically necessary by physicians
• Other drugs that are used for cosmetic purposes

Before the insurance companies reimburse the specialized medications, the billing companies need to perform prior authorization. This confirms whether those medications are covered under the insurance policy of the patient.

A well-documented prior authorization ensures that these medications are covered under the insurance policy, and the pharmacists are reimbursed effectively. The expert specialty pharmacy billing services have trained staff who are focused on the prior authorization of the specialized medications.

How prior authorization functions in specialty pharmacy billing

Prior authorization includes various approaches that determine the need for reimbursing a specialized medication.

1. Step therapy – This refers to the application of a clinically recognized medication before a more expensive or complex specialized medication is authorized. Insurance companies rely on this to reduce expenses by prioritizing other alternatives. For instance, in diabetes care, the insurer recommends the patient to try a generic, less-expensive medication like Metformin, before moving to the costly GLP-1 inhibitor.
2. Limitation on quantity – Some insurance policies have limitations on the intake of a few drugs. The billing companies need to have prior authorization for these medications to get reimbursed. For example, in case of opioids, there is a limit on the amount of Morphine Milligram Equivalent (MME) that a patient can intake per day.
3. Age limits – A specialized medication may not be reimbursed by the insurance company, if the patient’s age does not meet the clinical recommendations. For such cases, prior authorization is vital to ensure that the pharmacists do not face any claim denials. In case of the use of a specialized medication for Alzheimer's disease, prior authorization is required for patients under the age of 65, to verify the early diagnosis.

How do specialty pharmacy billings services optimize prior authorization

The billing companies pay special attention to prior authorization as it is the initial phase of the billing procedure. These companies implement the following methods to optimize prior authorization in specialty pharmacy billing:

1. Application of technology – The use of electronic prior authorization (EPA) platform reduces the processing time, paperwork, and communication discrepancies between insurance companies, pharmacies and providers.
2. Training staff on PA guidelines – The billing staff are regularly trained on updated prior authorization regulations to minimize errors and increase the rate of claim approvals. The specialty pharmacists receive the benefit of correct claim submission which results in faster reimbursement of claims.
3. Maintaining precise documentation – Documentation establishes the medical necessity for a specialized medication. The insurance companies reimburse the pharmacists based on this medical necessity. Organized and complete patient records assist in efficient prior authorization.

What you can benefit from an outsourced specialty pharmacy billing company

Specialized pharmacies are expected to rise and expand in the healthcare industry, due to the increasing reports of various chronic diseases. With the increasing number of chronic diseases among patients, specialty pharmacies have become more important than before. Due to this rapid increase in patient visits, billing services have also expanded, resulting in further complexities in billing. If you feel that prior authorization is a major challenge in your specialty pharmacy billing, outsourcing the task third-party billing professionals is the right choice. These services come with added advantages and lucrative billing solutions that help you achieve financial stability along with improved quality of service.

The outsourced companies offer a wide range of benefits such as real-time services across all U.S. time-zones, CPC-certified coders, dedicated account managers at no additional cost, EHR-agnostic solutions, and 30 days of free trial. Their complete specialty pharmacy revenue cycle management services cover all your pre-billing and post-billing tasks. They also provide streamlined remote patient support, that includes scheduling appointments, answering patient inquiries, and setting up reminders. These billing professionals use advanced billing software like PioneerRX and PrimeRX for automation. This helps in the reduction of manual errors as well. Some of these companies offer other benefits like an overall accuracy rate of 99%, reduction of costs up to 80%, 97% first-pass rate, all-inclusive pricing, and 30% shrinkage of AR buckets within the first 30 days. Talk to specialists now and streamline your billing processes for your specialty pharmacy.