The idea behind prior authorization (PA) is to benefit patient care. According to America’s Health Insurance Plans (AHIP), "Under the supervision of medical professionals, prior authorization can reduce inappropriate care by catching unsafe or low-value care and targeting where care may not be consistent with the latest clinical evidence – both of which can contribute to potential harm to patients and unnecessary costs."
Prior authorization is an important part of delivering a safe and superior standard of patient care. Unfortunately, it’s often seen as a tedious and prohibitive step in revenue cycle management (RCM). It’s the responsibility of providers to make the process seamless and efficient, to the benefit of both patients and professionals involved in practice RCM.
Challenges with prior authorization
Insurance companies require the prior authorization (PA) process to verify certain medications, procedures, or services are medically necessary before approval. Although PA attempts to manage healthcare costs, it can present several challenges for healthcare providers, such as:
- Significant administrative time. According to a survey by the American Medical Association (AMA), healthcare providers spend an average of 13 hours per week on PA-related tasks. With labor constraints an ever-present problem, this time is often seen as wasted in the context of more direct revenue-collection tasks.
- Cost to providers and patients. The same AMA survey found 40% of doctors have had to hire staff just to manage PA-related tasks, including completing forms and conducting phone calls to insurance companies. If insurers refuse to pay without PA, healthcare providers lose revenue and may have to bear the costs themselves.
- Delayed care. It may take days or weeks for insurance companies to process PA requests, which can delay the delivery of medical care to patients. This delay can result in worsening conditions as patients go untreated.
- Non-standardized approach. Depending on the level of service or the nature of care delivery, providers must navigate different requirements and regulations, making it challenging to submit PA requests. This lack of standardization can also cause confusion and errors, resulting in further delays and potential harm to patients.
- Lack of access to patient data. Problems with record storage and access, different technology platforms, and the lack of interoperability between them can make it difficult to access the patient data needed to confirm PA requests.
Mitigating prior authorization challenges
Despite obstacles associated with PA, there are opportunities to overcome them and improve the process for healthcare providers and patients. Potential solutions include:
- Consensus statement. The AMA, AHIP, and the American Hospital Association (AHA) have issued a consensus statement calling for greater transparency in PA requirements, criteria, and rationale.
- Selective application of PA. Payers should use selective application of PA if a provider has consistently shown the application of evidence-based medicine and high PA-approval rates.
- Digital technologies. Electronic health records (EHRs) and automation can speed up PA. For example, automated systems can identify if a medication or procedure requires PA and, if it does, can initiate and track the status of the request.
Incorporating automation into prior authorization
By automating repetitive tasks, such as completing forms and checking PA requirements, healthcare providers can focus on delivering quality medical care to their patients. Automation also reduces human error: Automated systems can, for instance, initiate a PA request, track its status, and receive approvals from the payer. These include electronic forms that prepopulate patient and medication information, electronic submission of PA requests, and automated alerts for status updates.
Still, there are challenges associated with PA automation, including:
- No national standard for PA. Without standardization, there’s no guarantee automated systems will work seamlessly across different payers, resulting in further administrative burdens for healthcare providers.
- Encrypted security measures. Healthcare providers must ensure patient information in the EHR is kept secure and confidential. Therefore, implementing security measures is essential to maintain data privacy and reduce the risk of data breaches.
- Employee education. Healthcare providers must learn to use new digital systems to confirm the automation process works efficiently.
Making PA a seamless process
Prior authorization is something of a necessary evil, but the process can be simplified with the right approach. Automating PA elements can save valuable billable hours and clerical time while increasing the speed of care, invoicing, and payments. Rather than lament prior authorization, providers should look for ways to improve it and make it a cornerstone of their approach to revenue cycle management.
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