Prior Authorization Continues to Burden Providers

Providers and payers differ on the need for prior authorization. Payers call it a necessity. Providers say it’s a burden. Is there room for compromise?

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Health care providers and payers have a precarious relationship. Providers are focused on patient care and appropriate payment for their service. Payers prioritize keeping reimbursements low. Prior authorizations (PAs) are one major point of contention. Providers complain of delays delivering health care services and negative effects on patient outcomes, but payers contend that PAs keep medical costs in check and even improve patient care. PA requirements aren’t going away, but there are ways for payers to ease the burden on health care providers.

Hospital claim denials up

A recent American Hospital Association survey reports 89% of hospitals and health systems have experienced an increase in claim denials over the past 3 years. The most common reasons for claim denials include post-payment audit denials, partial or line-item denials, and down coding — coding at a lower level than supported by medical necessity. But the primary cause of the denial is PA refusals.

The burden and impact of PAs

A 2020 American Medical Association (AMA) survey of 1,000 physicians found 86% of them found PAs a significant drain on time and resources. Not even the COVID-19 pandemic — with daily new cases above 150,000 at the time of the survey — moved payers to ease PA requirements.

Physicians believe PA demands — for medical tests, clinical procedures, medications, and medical devices — undermine their professional judgment and interfere with their ability to treat patients. Survey respondents report weekly averages of 16 hours, or two full business days, spent on PA activity. Forty percent have staff who work exclusively on PAs. And 90% report somewhat or significant negative effects on patient outcomes when the patient’s treatment requires a PA.

Improving Prior Authorization

Patients and providers are often forced to wait for payer approval of PAs before beginning a course of treatment. The AMA suggests providers implement a proactive strategy to avoid delaying patient care. Recommendations include checking PA requirements and providing necessary documentation prior to prescribing treatment or medication and/or automating PAs with electronic processing.

But electronic processing comes with its own set of challenges, including data inconsistency, limited vendor solutions, and poor system interoperability. Providers still primarily using phones, faxes, and emails to manage the PA process. Dated technology increases administrative workload and contributes to patient care delays.

In 2020 — now former administrator of the Centers for Medicare & Medicaid Services (CMS) — Seema Verma said, “Prior authorization is a necessary and important tools for payors to ensure program integrity, but there is a better way to make the process work more efficiently to ensure that care is not delayed and we are not increasing administrative costs for the whole system.” The CMS rule proposed an increase in electronic exchange of health records between payers, providers, and patients as a method for easing the PA burden.

In general, providers and their professional associations approved of the proposed rule, though most would like to see PA turnaround times shortened so as not to delay patient care. Most payer groups took the opposite view, objecting to a shortened review and comment period and unrealistic implementation dates.

While each side expressed concerns and/or objections regarding the proposal in its current form, both also expressed support for the rule’s end goal — improving health care quality and lowering costs by coordinating patient care and streamlining the PA process. The rule was finalized on January 15 and is currently under agency review.  

Contact TruBridge to learn more prior authorization solutions.

Written by Pat Murphy
TruBridge Senior Vice President