Electronic Prior Authorization For Medicare Part D – The Essentials

The new CMS mandate for Electronic Prior Authorization (ePA) requests focuses on the NCPDP SCRIPT version 2017071 standard for four electronic Prior Authorization (ePA) transactions. The PA initiation request/response, PA request/response, PA appeal request/response, and PA cancel request/response and prescribers will be required to use this standard when performing ePA transactions for Part D-covered drugs when prescribed to Part D-eligible individuals.

An ePA transaction standard would allow a prescriber using an eRx system or an EHR with eRx capability to determine whether the beneficiary’s plan requires a PA for a given medication.

Understanding the Mandate

Currently, it is not mandatory to conduct prior authorizations electronically, but if a prescriber to do so in the’ Part D’ context then it has to be via the NCPDP SCRIPT. The comments in the Final Rule elaborate as follow:

“This rule only requires plans support the NCPDP SCRIPT standard version 2017071. Prescribers who elect to conduct PA electronically in the Part D eRx context will be required to do so using the adopted standards. Prescribers remain free to use non-electronic means of conducting PA, and Part D plans are still required to accept prior authorization requests via existing means, such as via facsimile (FAX).”


The Technological changes Needed

  • The EHRs must comply with the ePA transactions that are PA initiation requests/responses, , PA appeal requests/responses, and PA cancel requests/responses. These Electronic Prior-authorization transactions must be built into the system since the PA process has historically been handled via facsimile exchange of information or telephone call and only recently via payer-specific web portals.
  • Also, those vendors who have already implemented the new script without the ePA transactions must implement the necessary changes to support the ePA transactions within NCPDP SCRIPT standard version 2017071

The Impact and The Parties Affected

The ePA mandate has significant repercussions and it affects specific players in the healthcare industry. Shown below are the essentials:

Who does the mandate affect?

  • This rule is applicable to Part D Plan Sponsors, Providers and Pharmacies.
  • Entities impacted by the PA processes include:
    • Pharmacies receiving ePA’s from providers and filling the prescription,
    • Providers (Prescribers) who use ePA,
    • Part D plans sponsors,
    • EHR vendors who need to modify their products

What happens if they don’t do it?

  • There are no penalties for non-compliance to this rule as providers are still free to use the non-electronic means for prior authorization.
  • What are the hard deadlines and are there any exceptions?
  • Beginning April 1, 2021, Part D sponsors and prescribers may use the NCPDP SCRIPT standard, Implementation Guide Version 2017071 to provide for the communication of a prescription or prescription-related information between prescribers and Part D sponsors for the all the electronic prior authorization transactions.
  • Beginning January 1, 2022, Part D sponsors and prescribers must use the NCPDP SCRIPT standard, Implementation Guide Version 2017071 to provide for the communication of a prescription or prescription-related information between prescribers and Part D sponsors for the all the electronic prior authorization transactions.

What are the benefits to be achieved?

  • Saving time and money by causing overtime costs of manual prior authorizations. Based on the transaction approx. time saving can be as following {Source: Based on CVS Caremark Data Analysis}
  • Med D, ePA will take 5.9 minutes (30x faster) compared to 2.9 hours through fax.
  • Commercial, ePA will take 7.5 minutes (95x faster) compared to 12 hours through fax.
  • Specialty, ePA will take 4 hours (10x faster) compared to 41 hours through fax.
  • Real-time Authorizations/denials for the drug delivery.
  • Delivers more accurate information about coverage and costs of drugs at the point of prescribing.
  • Complying with ePA under the NCPDP Script is proposed for the Part D Drug but it can also be used for non-Part D prescription drugs also.

How much time would the implementation take?​

  • As per the estimations from the published by CMS & HHS under their federal regulation documents, following are the Implementation Time and Cost ePA transaction to Payers and EHR Vendors:
  • The approx. Hours that EHR vendors will approximately take are 200 developing hours and 800 programming hours to enable the EHRs to utilize two standards i.e. the NCPDP SCRIPT standard version 2017071 for Part D ePA and the HIPAA standard for other contexts.
  • This rule also estimated the cost for plan sponsors to implement this standard would be approx. $6500 / Plan.

Interested to learn more about the ePA mandate? Our healthcare technology wizards will walk you through confirming to its intricate requirements. Reach out to us at info@nalashaa.com for more details.

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Nihar Vyas

Nihar Vyas

Nihar is a healthcare analyst and loves to analyze deep down into the healthcare domain. He has an association with US Healthcare for almost a decade, crafting the solutions towards all the Clinical, Revenue Cycle and Regulatory aspects.

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