Everything payers need to know about simplifying prior authorization
What is prior authorization?
Prior authorization is a utilization management process primarily used by healthcare payers that requires certain treatments or prescriptions that are prescribed by clinicians to first be evaluated to assess the medical necessity and cost-of-care ramifications before they are approved and deemed reimbursable.
Why is the Prior Authorization Process Important?
This process was designed to ensure that members receive safe treatments that meet appropriate care standards, policies, and reimbursement requirements set forth by the payer. Payers have the unique advantage to see how a member utilizes their coverage and what treatments they may have already received, and, because of this, the prior authorization process may help prevent duplicate and unnecessary treatments.
Why is the prior authorization process so complex?
The prior authorization process can be complicated by several factors, including:
- An excessive number of steps, each introducing the potential for delays and user errors
- It requires active participation by both payers and providers, each of whom have different motivations, workflows, and infrastructure
- Lack of consistent standards, particularly when it comes to payer guidelines
- Fluctuating payer rules must be constantly monitored
- Manual review of prior authorization requests and medical charts by clinicians
- Ever-evolving and changing regulatory guidelines
The complexity of the prior authorization process is an issue that will not go away soon. Data from the 2021 CAQH Index found that, of the $391 billion spent on administrative complexity in the US healthcare system, 11% is spent conducting administrative transactions.
Why is it important to streamline the
prior authorization process?
With the healthcare landscape continuing to evolve, it can be difficult to keep up with new policies and requirements that are used to make reimbursement decisions. When new laws are enacted or technology requirements are introduced, organizations that lacks streamlined communication may fall behind.
Providers reported that 88% classify the burden of prior authorizations as high or extremely high.Learn more
All stakeholders benefit when you improve the prior authorization process. Plan members will not have unexpected bills and providers have confidence that prescribed care meets the health plan reimbursement requirements.
Electronic prior authorizations are instrumental in creating enormous efficiency for payers and providers.
How can you speed up the
prior authorization process?
One of the main reasons that prior authorizations can take so long to resolve is that incomplete or incorrect information is submitted to the payer, which triggers a denial and manual re-work on the provider side. It’s inevitable that errors arise because extensive information about the member, the ordering provider, the requested service, and the medical scenario are all required and if any of it is amiss, it will precipitate a denial. Once a denial is rendered, it’s often difficult to reverse.
Automating the end-to-end prior authorization process as early in the cycle as possible may reduce the likelihood of errors, lessen the amount of manual work wasted on tedious tasks, and accelerate patient care.
Five Ways Interoperability Can Save Time and Money:
- EMR/PMS Integration
- Clinical Documentation
- Documentation Requirements
- Automated Status Updates
- Requesting Additional Information
Legislative Impacts on Prior Authorizations
Under the Two-Day Rule, the healthcare industry leaped forward in breaking down barriers to timely patient care. Payers are expected to request additional documentation within two days of receiving an authorization request and return a final determination within two days of receiving all necessary inputs.
The Two-Day Rule creates transparency and enables self-service or automation for providers throughout the prior authorization lifecycle, This reduces phone calls, faxes, and manual intake processes, and improves collaboration with payers.
The Importance of the Improving Seniors’ Timely Access to Care Act
The Improving Seniors’ Timely Access to Care Act of 2022 (H.R. 8487) moving through the Senate could improve the efficiency and transparency of prior authorization in Medicare Advantage plans by establishing an electronic prior authorization program. Learn more about how this bill could become law.
Gold Card Legislation
The Texas “gold card bill” (HB 3459) allows physicians with a prior authorization approval rate of 90% or more over six months on certain services to be exempt from a prior authorization for those services. After being signed into law in October 2022, it’s anticipated that other states may follow suit. Find out how it may affect payer-provider collaboration.
What are the implementation challenges
of electronic prior authorizations?
Healthcare authorizations can be one of the most costly and frustrating barriers to effective patient care, contributing to 93% of delayed care cases.
Electronic transactions are not new and have their own set of challenges that have arisen over the years. This leads to the question, what are the challenges with implementing an electronic prior authorization process?
Challenges of the Prior Authorization Process
- Variety of Use Cases: There are a wide variety of authorization use cases to consider for any payer. The scenarios can range from very simple to very complex and are often diverse in their requirements.
- Clinical Data & Attachments: Not only do providers need to understand what data is required when submitting a prior authorization, but the electronic submission solution needs to be able to collect that data appropriately.
- Standards vs. Custom Data Requirements: The data requirements of complex cases make it difficult to deploy a system that uses a messaging standard that cannot be extended over time.
- Automation: Payers can also implement business rules in their electronic solutions that can help ‘pre-process’ a significant number of authorizations before they even reach a final submission.
- Bi-Directional Communication: Cases that do require medical review benefit from leveraging an electronic solution’s ability to enable bi-directional communication workflows between payer and provider. In these cases, additional details may be required by the plan’s medical review staff that was not submitted in the initial request by the provider. Discover more opportunities to mitigate challenges with payer-provider collaboration.
Once an organization implements an electronic prior authorization process, they are taking the first steps towards dramatically increasing their business efficiency and effectiveness, reducing costs and accelerating patient access to quality care.
Inefficiencies of Prior Authorizations and
How Payers Can Overcome Them
Here are five key inefficiencies the industry faces, and ways payers can help improve the effectiveness of the prior authorization process.
- Non-critical services sometimes require prior authorization creating work that yields little benefits for providers or payers. Consider limiting prior authorizations only to services that require medical necessity or policy reviews and explore eliminating the prior authorization requirement for routing care.
- Prior authorization is confusing and complicated. Consider leveraging electronic tools that make it clear when and why a prior authorization is required, what information is required for each kind of service, and provide details on what is and is not within guidelines for treatment.
- Prior authorization approval turnaround time results in delayed care. Consider leveraging electronic solutions that can automate the process where possible, reducing the effort and improving data quality for submissions and status determinations.
- Lack of transparency about the status of an authorization can cause delays and costly back and forth between providers and payers. Consider proactively sending status updates and follow-up communications to providers electronically through the same portal where the authorization was submitted.
- Transmitting supporting documentation via a variety of channels can often take a long time and may be difficult to keep track of for providers. Consider implementing a secure online solution that allows providers to easily send information electronically.
How to Ease the Burden of Prior Authorizations?
There is no question that prior authorizations put a tremendous burden on providers. Not only are prior authorizations confusing and complicated for all stakeholders, but they are also one of the highest cost payer/provider transactions. This is because much of the work is done manually and requires lengthy back and forth with the insurance carrier.
Here are a few ways that payers and providers can work together to help improve the prior authorization process and free their time for better use.
Tips to Ease the Burden of the Prior Authorization Process
- Realize that not only everything needs prior authorization
- Turn to technology! Electronic tools can provide more transparency (and efficiency).
- Improve data quality
- Alleviate the supplemental documentation guessing game
- Speed care in service of patients
11 Tips to Help Payers Improve
the Prior Authorization Process
Here are a few quick tips that payers can use to automate and streamline the prior authorization process:
- Eliminate prior authorizations for non-critical services, including routine care
- Adopt the right technology
- Reduce prior authorization approval time, speed care
- Increase transparency to eliminate delays
- Create an electronic trail, not a paper one
- One size does not fit all
- Complex policy data requirements
- Account for attachments
- Adopt standards
- Increase automation
- Increase payer-provider communication
Maximize ROI, Minimize Costs
Implementing these solutions does not require a heavy lift to modify Electronic Data Exchange (EDI) content for the payer and provides the opportunity to reach every provider, large and small, tech-savvy or not. Our NaviNet Open solution provides a blueprint for payers to support the Two-Day Rule. As more organizations adopt standards, you can rest assured that the NaviNet platform will evolve to support deeper integration, interoperability, and automation.
NaviNet Open Authorizations allows payers to request additional information and push status updates to providers. The notification features built into the platform ensure providers and their staff know when something needs to be addressed or an authorization has been approved. Our user interface makes it easy to upload the necessary documentation or look up the details about authorization status.