O4 Hubs detail
O4 Detail Hero Banner

Specialty drugs and prior authorizations

A prior authorization process may not be enough for health plans to ensure that specialty drug utilization meets their policy criteria.

O4 1 Column (Full)
O4 Text Component

Specialty drugs and prior authorizations

Specialty pharmacy drugs are classified as high-cost, high-complexity and high-touch medications used to treat complex conditions.

Specialty drugs typically require a prior authorization. But there are circumstances where there’s misalignment between what is approved by the payer and what is actually ordered, administered and billed by the provider on the medical benefit.

This misalignment leads to administrative and medical spend risk, but it can also result in issues regarding patient safety.

Health plans must ensure correct and appropriate specialty drug coding. Doing so can positively impact their disease, case, financial, risk score and clinical function management. It also supports the enforcement of the federal regulations outlined in the False Claims Act.

O4 Text Component

When prior authorization isn’t enough

Comprehensive enforcement of specialty drug policies necessitates both a nuanced and effective authorization process. A detailed and comprehensive review of the medication orders and associated billed charges to ensure comprehensive policy compliance is also imperative.

Examples of common misalignment between the prior authorization and the drug that is ultimately billed on the medical claim include:

  • Approved drug isn’t the billed drug and the billed drug isn’t supported by policy.
  • Approved dosing isn’t the billed dosing and the dosing is inconsistent with policy.
  • Exceeds approved duration/frequency of how often the patient should receive the drug.
  • Billed drug creates patient safety risk. This could be a contraindication to either a condition or a previous treatment received by the patient prescribed by another provider. 
O4 Text Component

Creating a comprehensive policy

Specialty drug edits don’t replace prior authorization. But they can help assure prior authorization enforcement. Health plans will want to compare edit criteria against their prior authorization, medical, coverage and reimbursement policies. Based on this comparison, they can modify edits to further enforce these policies.

Claims editing software enables health plans to edit against the information on the claim line using data-driven rules that have been aligned with the health plan’s policy. For example, if infliximab is given sooner than 21 days for maintenance dose, it would go against plan policy requiring a 42-day interval between appropriate dosing. 

The pre-pay claim validation/audit or data mining team can then validate the information on the medical claim against the prior authorization on file. For example, prior authorization approval of every six weeks, but the dose is given every four weeks.

O4 Text Component

Linking prior authorization capabilities and claims editing software enables a seamless experience for all stakeholders, including health plans, providers and members.