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May 4, 2023

The Pros & Cons of Automated Prior Authorization: What to Know Before Choosing a Software Partner

by Susan Lawson-Dawson | Healthcare Technology, Prior Authorization

Back in February 2018, the American Medical Association (AMA) released a Consensus Statement on Improving the Prior Authorization Process in collaboration with the American Hospital Association, America’s Health Insurance Plans, American Pharmacists Association, the Blue Cross Blue Shield Association, and the Medical Group Management Association. 

The group collectively acknowledged, “The prior authorization process can be burdensome for all involved—health care providers, health plans, and patients.” Yet five years later, prior authorization volume has exploded. Prior authorization automation can relieve the pressures providers and payers face, while accelerating the process so patients get the care they need, when they need it. 

Current challenges with manual prior authorization

Prior authorization was established to ensure both the medical necessity and cost-effectiveness of healthcare procedures, services or medications, while preventing fraud and abuse. Instead, prior authorization has morphed into something else entirely. 

  • Time-consuming: The manual prior authorization process often demands extensive paperwork and repeated written and oral communication between stakeholders. These requirements can cause significant delays in obtaining approvals and may postpone necessary treatments or procedures.
  • Administrative burden: Healthcare providers and their staff must dedicate substantial time and resources to obtain the necessary approvals due to the back-and-forth communication involved in the process. This commitment detracts from the time and focus they need to provide quality care in a timely manner to their patients.
  • Error-prone: Human error can make manual prior authorization susceptible to mistakes in paperwork, miscommunications, or misunderstandings of the requirements. These errors can cause delays or denials of necessary treatments or medications, adversely affecting patient care. Likewise, from the payer side, processing errors and poor clinical decision support can lead to unnecessary delays or denials and member dissatisfaction. 

Why is prior authorization so problematic? 

With more than 1,000 payers in the U.S., each with their own plans and policies, the lack of standardized requirements leads to confusion and inconsistencies in the approval process. These discrepancies can further slow down the process and frustrate healthcare providers and patients alike. Prior authorization delays can cause treatment delays, potentially worsening a patient’s condition or causing unnecessary suffering. Moreover, patients might be denied access to necessary treatments or medications if they do not receive prior authorization.

Ultimately, manual prior authorization incurs significant administrative costs for healthcare providers and insurance companies, ultimately increasing healthcare costs for all parties involved.

How does automated prior authorization solve the challenges?

Prior authorization software enables seamless data exchange via secure APIs. By making these connections between siloed patient, provider and plan data, the process requires minimal data entry before automation takes over. Plus, because it requires less manual effort, the likelihood of preventable errors or omissions shrinks significantly. The result? 

  • Greater efficiency and reduced administrative burden: By streamlining the prior authorization process, providers spend less time on paperwork, freeing staff and clinicians to focus on patient care. 
  • Faster approval times and better patient outcomes: Automated prior authorization also supports faster approval times, which can have a significant impact on patient outcomes. Because prior authorization software gathers precisely what’s needed, payers can review claims more efficiently. Built-in tools for clinical decision support and auto-adjudication of prior authorization requests enable quick, confident decisions. 
  • Substantial cost savings and revenue optimization opportunities: By automating a costly, time-consuming process like prior authorization, providers and payers can lower operational costs.  Plus patient/member satisfaction climbs, helping both providers and payers build loyalty that helps keep revenue levels up. 

Automated prior authorization comes with risks

Of course, technology adoption always involves a level of risk, which is why choosing the right automated prior authorization solution is so important. 

As with any healthcare technology, you need to consider the increased risk of data privacy and HIPAA compliance. Automation relies heavily on the storage and transfer of sensitive patient data. Any security breaches can lead to significant legal and financial consequences. 

When looking at your options, look for a solution that meets exceptionally high security standards. Myndshft, for example, has achieved HITRUST Risk-based, 2-year (r2) Certification, demonstrating that our platform meets regulatory requirements and industry-defined best practices to appropriately manage security risk. 

In addition, change management can make or break adoption. Choose a provider that offers solid training, excellent support, and clear communication to ensure your staff gets off to a fast start with new technology. Of course, one of the biggest advantages of an automated prior authorization platform is direct integration within your existing EHR or system of record. This reduces workflow changes that can impede adoption. In fact, with full integration, prior authorization becomes a frictionless piece of the workflow your staff already uses daily. 

Prior authorization automation solutions have the potential to improve the efficiency, accuracy, and cost-effectiveness of the prior authorization process. However, to ensure safe and effective implementation, it is essential to consider the potential risks and how to mitigate them. 

Are you ready to automate? Start a conversation with Myndshft