RD613 - Report of the Electronic Prior Authorization Work Group – November 1, 2022

Executive Summary:

During its 2022 Session, the General Assembly passed HB 360(*1) and SB 428(*2) (ePA legislation) to modernize the prior authorization process for prescription drugs. If this ePA legislation is reenacted during the 2023 Session, the following provisions will take effect on July 1, 2025: one, carriers must implement an ePA process for prescription drugs; two, participating health care providers must ensure that any e-prescribing or electronic health record system they own or contract for can access the carrier’s ePA process and the real-time cost information for a covered prescription drug that is made available by a carrier; and three, carriers or their pharmacy benefits managers (PBM) must provide real-time cost information to enrollees and contracted providers for a covered prescription drug, including any cost-sharing and prior authorization requirements.(*3)

In the interim, the ePA legislation directed the State Corporation Commission (Commission), in coordination with the Secretary of Health and Human Resources, to establish a stakeholder work group to evaluate and make recommendations to modify the process for prior authorization for drug benefits to maximize efficiency and minimize delays.

The work group submits this report of its findings and recommendations. While the Commission's Bureau of Insurance (Bureau) and the Health and Human Resources Secretariat (HHR Secretariat) staffed the work group and served as facilitators, this report represents the perspectives and consensus of the participating stakeholders.

The work group recommends that Virginia move forward with implementing the 2022 ePA legislation and make these provisions permanent. It also recommends that in the run up to July 1, 2025, the Bureau, together with the Secretary of Health and Human Resources, continue to provide a forum for stakeholders to meet and assess progress towards implementing ePA and real-time cost information for prescription drugs.

The work group agreed on four changes to the 2022 legislation: one, specify that the online process is to link directly to all e-prescribing systems and electronic health record systems using the SCRIPT standard; two, clarify the provision prohibiting carrier fees and charges for providers to access the online process; three, impose a readiness deadline; and four, revise the waiver provision to have the term set by regulation rather than statute. The work group did not achieve consensus on another six proposals.

The work group also made 16 findings. Chief among these was the recognition that automating the prior authorization process for prescription drugs will help streamline and accelerate the disposition of prior authorization requests and, working in tandem with real-time benefit tools, will improve the patient experience and reduce the burde on all involved. Further, it found that Virginia health plans are technologically ready to implement ePA and real time cost information. Finally, the work group found that Virginia will become one of 32 states that have addressed ePA for prescription drugs if the General Assembly reenacts the legislation as recommended.
(*1) Chapter 284, Acts of Assembly – 2022 Session.
(*2) Chapter 285, Acts of Assembly – 2022 Session.
(*3) Chapter 284 and 285, Acts of Assembly – 2022 Session (amending § 38.2-3407.15:2. B. and § 38.2-3407.15:7 of the Code of Virginia)