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Myndshft Blog

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September 15, 2022

Smart Ways Prior Authorization Automation Helps You Keep Your Bottom Line Healthy, Despite Surging Labor Costs

by Susan Lawson-Dawson | Healthcare Technology

Back in December 2021, Moody’s Vice President Brad Spielman told Fierce Healthcare that “Labor costs indeed are the challenge that the sector is facing over the next year and will result, in our opinion, in driving expenses at a rate higher than revenue growth.” How can providers reverse shrinking margins and continue to deliver care when patients need it? Prior authorization automation can help.

Reduce labor costs (and overcome staffing shortages) by enabling efficiency in your intake process

Labor costs, which represent more than 50% of a hospital’s expenses, grew by 19.1% in 2021. Halfway through 2022, it appears that Spielman’s prediction remains accurate. From January through July, labor expenses increased 13.4%. And it’s not just hospitals feeling the financial squeeze. From ambulatory surgical centers to physical therapy practices, no provider is immune to rising labor costs.

The staffing shortage only adds to the problem. Hiring competition is fierce, which pushes wages higher. What’s more, when hiring for non-clinical roles, healthcare providers aren’t just competing against each other; demand in other industries shrinks the hiring pool even further.

For some providers, the frequency of prior authorization submissions adds to the burden. In physical therapy, for example, prior authorizations typically cover a set number of visits. As a result, physical therapy practices must re-verify benefits to ensure they haven’t changed during the course of treatment and submit additional prior authorization requests when therapy needs to be extended.

Lower the administrative burden with prior authorization software

You’re stuck between a rock and a hard place. “Healthcare organizations will not be able to hire their way out of this shortage,” says Matt Wolf, director and senior healthcare analyst for consulting firm RSM. What can help? Calling technology “inherently disinflationary,” Wolf suggests that automation offers “the only way to bridge that gap.”

Prior authorization automation streamlines the intake process. Instead of repetitive data entry and tracking down prior authorization requirements, an automated prior authorization process requires minimal data entry to get started.

Myndshft, for example, fits seamlessly into the intake workflow, allowing benefits verification, patient financial responsibility calculation, and prior authorization requirements determination to take place simultaneously. If the service or procedure requires prior authorization, the system automatically identifies the appropriate form and submission criteria, submits via the payer’s preferred method and monitors the status of prior authorization requests. The whole process takes under 5 minutes, versus 44 minutes or more of the typical manual approach.

Increased efficiency relieves the twin pressures of rising labor costs and staffing shortages. But that’s not the only benefit to be gained prior authorization software.

Improve submission completeness to reduce preventable prior authorization denials, rework, and payment delays

You can’t keep your bottom line in the black if reimbursements fall. And appealing denied claims only adds to your staff’s workload, so it’s a vicious circle. The Journal of AHIMA notes that denial rates have increased more than 20% since 2018. With a cost to rework denials between $25 to $181 per claim, making sure you submit a complete prior authorization request is crucial. Unfortunately, it’s a sore spot for many providers because 90% of denials are preventable.

Getting it right from the start is crucial. Electronic access to patients’ health and benefits information, providers’ clinical documentation, and payers’ plans and policies—or what we call Collective Healthcare Intelligence—ensures that you capture a complete picture when preparing prior authorizations for submission. Automation, combined with this data, ensures that the prior authorization requirements are based on the specific payer, plan and CPT or HCPCS codes, virtually eliminating preventable errors.

Enhance both staff and patient experiences to yield real value

Automation makes some people nervous, but it shouldn’t. In fact, Matt Wolf explains, “It’s not about removing the human being from care or squeezing in more primary care visits or having a skeleton crew of IT people doing more functions; it’s about helping people to work at the top of their abilities, whether they’re a systems admin or a cardiac surgeon.” Removing administrative burdens frees your staff and clinicians up to focus on patients, not paperwork. That means higher job satisfaction. In turn, this helps with retention, a plus given the staffing shortage and looming retirements of Baby Boomers.

More importantly, automated prior authorization helps connect patients to the care they need, sooner. Prior authorization delays often lead to treatment postponement or abandonment. Neither of which is good for your patients or your bottom line.

Interested in seeing automated prior authorization in action? Get in touch!