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Myndshft Blog

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August 19, 2022

Hold on Tight: Waves of Healthcare Regulations Ahead in Effort to Solve Prior Authorization Woes

by Susan Lawson-Dawson | Prior Authorization, Revenue Cycle Management

“A swelling tsunami of information.” That’s how the Journal of AHIMA described the ongoing surge of legislation and guidance for interoperability. Improving data exchange addresses administrative burdens like prior authorization. During a recent panel discussion with post-acute care providers, we asked for their take on current and proposed laws. What’s promising? What’s not?

Let’s start with an approach that’s viewed as a mixed bag.

Gold Carding to Reduce Prior Authorization Burden

Gold carding refers to the practice of exempting providers from seeking prior authorization of a service IF they have an acceptable approval rating over a specific time period. The approval rating is typically in the range of 90% to 100%; the time period varies between six months to one year. West Virginia and Texas have versions of gold carding laws in place. Vermont, New York and Kentucky have similar laws in the works. And in early June, a bipartisan bill titled “Getting Over Lengthy Delays in Care as Required by Doctors Act of 2022”—aka the “Gold Card Act”—was introduced in the House.

In every case, the main goals are:

  • To eliminate some of the administrative burden of prior authorization
  • To improve timely access to care.

But how effective is gold carding?

3 Reasons Gold Carding Might Lose Some of Its Luster

You know the expression, all that glitters isn’t gold? Well, that might be the case for gold carding too. Julianne B. Dreon, Senior Director, Revenue Cycle at MedQuest says gold carding has worked fairly well with one or two payers, but added a caution. “I’m not going to say yet that the process has eliminated all of the authorization work,” she says. If your organization is testing the waters of gold carding, you can count on less rigid information requirements, but don’t expect miracles.

Liane Parker, RN, CPHM; CEO of Quantify Remote Care offers a different perspective gained from her years on the payer side. While gold carding makes sense in principle, she’s seen how having a hall pass on prior authorizations can lead to overuse. As the saying goes, just because you can, doesn’t mean you should. Patients, after all, still have deductibles and copays to worry about. And isn’t the whole point of utilization management to ensure that people receive appropriate care?

In addition, Wes Bernhardt, Managing Partner, One Path Diagnostics points out that gold carding could lead to inequity. “The reality is, most providers and even insurance companies are subject to leverage,” he says. Smaller practices may not be able to compete with larger provider groups, putting them—and the patients they care for—at a disadvantage.

In the end, gold carding sidesteps the bigger issue that keeps prior authorizations stuck in slow motion: interoperability.

Timely Access Law Takes Aim at Prior Authorizations

You couldn’t miss the headlines when news broke about prior authorization denials among Medicare Advantage organizations (MAOs). The U.S. Health and Human Services (HHS) Office of Inspector General (OIG) reported that 13% of MAO denied prior authorization requests met Medicare coverage rules, meaning they would have been approved under traditional fee-for-service Medicare. The OIG also revealed that 18% of denied payment requests met both coverage and billing rules. In many cases, the denials were reversed, but only after being appealed, adding to the administrative burden of providers and plan members.

In light of these findings, both the House and the Senate have introduced bills aimed at streamlining prior authorization. Let’s take a closer look at the House version: “The Improving Seniors’ Timely Access to Care Act of 2022.” Focused specifically on Medicare Advantage plans, it includes several mandates:

  • Adherence to new federal standards and enable real-time decision-making for routinely approved service
  • Acceleration of prior authorization decisions for all other services in Medicare Part C
  • Payer reporting on use of prior authorization, as well as approval and denial rates for improved transparency

While these bills will take some time to wind through the legislative process, other regulations are already taking effect.

Regulations Driving Interoperability & Automation

Healthcare regulations are generally initiated in stages and that’s the case with the anti-information blocking rule. Established to help achieve interoperability and patient access goals of the “21st Century Cures Act,” the rule is already in effect for a limited set of data. On October 6, 2022, stakeholders will be expected to share all EHI, including unstructured data.

Mandates to boost electronic prior authorization are also on the horizon. A proposed rule announced in December 2020 sets a tentative January 1, 2023 deadline for expanding access beyond patients to address prior authorization specifically. The CMS Interoperability and Prior Authorization Proposed Rule recommends the following:

  • Payers establish a Document Requirement Lookup Service (DRLS) API so providers can easily locate prior authorization requirements within the EHR workflow.
  • Payers offer a FHIR-enabled electronic Prior Authorization Support (PAS) API that meets HIPAA standards and allows seamless requests and responses.
  • Payers include a specific reason for denial, regardless of how the decision is sent, to improve communication.
  • Payers cut prior authorization decision time to 72 hours if a request is urgent and 7 calendar days for those less urgent requests.
  • Payers publicly report data regarding the prior authorization process, approval and denial rates, and average time to determination.

Payers may have the spotlight in the above recommendations, but providers will have to be ready on their end. After all, communication can’t happen from one direction only. As a result, providers will feel the pressure to have the appropriate technologies in place to facilitate data exchange too. But we’ll leave that topic for a future blog.

In the meantime, see how Myndshft can help you ride the interoperability wave to fully-automated, end-to-end prior authorization.