Prior Authorization: Concept vs Execution 

To contain costs, health insurers and laboratory benefit managers (LBMs) rely on utilization management to introduce checks and balances that assess the appropriateness of a prescribed care regimen before authorizing it. The thinking behind this being that a less expensive option may be sufficient and that a stepped approach to patient care makes more financial sense than simply defaulting to the most expensive option. 

To make utilization management work, payers and LBMs increasingly require providers to obtain prior authorization, a preemptive check to gauge the medical necessity and cost ramifications of a prescribed treatment and — most importantly — whether the payer will reimburse the provider for the procedure.  

Conceptually, few would disagree with the rationale behind this approach. It seems reasonable. But when concept meets execution in a real-world care delivery setting, the prior authorization process creates some big problems for providers and patients.

Why Does Prior Authorization Pose Such Problems?

Healthcare providers are already inundated with paperwork and other manual processes that siphon off time that could be spent treating patients. In fact, according to a report in the Annals of Family Medicine, doctors now spend six hours daily attending to administration, giving rise to the epidemic of “physician burnout” that is leading to an exodus of clinicians from healthcare. Adding more bureaucracy and ambiguity with prior authorization requirements just exacerbates the situation. 

The burnout isn’t contained to physicians either. Healthcare administrators — the people specifically designated to deal with the process and paperwork — are also cratering under the sheer volume of i’s to be dotted and t’s to be crossed. The administrative burdens have increased but the time to get the work done has remained the same. 

Here’s a graphic representation of why the current prior auth process is so problematic.

Medical billing departments have responded with a triage approach, attending to larger claims while writing off lots of smaller claims. This is especially true at diagnostics and genomics labs, where the revenue cycle challenges from prior authorizations are even more acute. 

Some revenue cycle management teams have also responded by outsourcing billing and collections. And while that approach certainly increases the number of people available to work a claim, it still doesn’t scale. It’s also subject to human error, especially from outsourced teams that may not be trained on the revenue cycle nuances familiar to categories like specialty pharmacies, diagnostics, and infusion centers. 

Automating Prior Authorization 

Relying on an antiquated system of fax machines and stopgap manual activities will just never suffice. Introducing more industry standards may help a bit, but to truly get ahead of prior authorization and efficiently manage the process requires automation.

But automating the prior authorization process is complicated. 

• There are a lot of steps involved, each introducing the potential for delays and errors.
• Personnel from both the payer and provider side participate, each with different motivations, workflows, and infrastructure.
• There are very few standards, particularly when it comes to payer rules, so it’s difficult to codify prior auth into a system suitable for technology to address. 
• Payer rules often change and need to be constantly monitored and revised.
• There are thousands of payers and health plans.

Complicating things further is the definition of “automation” itself. Dozens of technology providers claim to automate prior authorization but most simply address a sliver of the process, such as automating fax submissions of prior auth requests. Hardly a complete solution. 

To successfully tackle prior authorization demands a more orchestrated approach, where individual tasks within the prior auth continuum are automated, then configured and optimized to work as a system using advanced process automation. 

To truly automate prior authorization requires an end-to-end approach that includes:

• An enterprise master patient index (EMPI) that correctly identifies the unique patient. 
• Real-time eligibility and benefits verification. 
• A single source for direct connections to all the payers that your organization does business with. After all, if the automation doesn’t communicate with most of the payers, it has limited utility. 
• A comprehensive payer rules library that automatically synchronizes eligibility and prior auth rules, so you always have the most up-to-date data. 
• Direct integration into core Health IT systems like EHRs, LIMS, HIS, and revenue cycle solutions.

Here’s a graphic representation of how the prior auth process should and can work.

Conclusion

The rise in the volume and complexity of prior authorization requests is saddling already overburdened clinicians and healthcare industry administrators with too much paperwork to effectively perform their primary role, treating patients. As a result, it’s leading to escalating levels of physician burnout and decreasing levels of patient satisfaction. 

Allocating more revenue cycle personnel to address the issue won’t scale and will still be subject to human error. 

To truly solve the challenge that pre-authorization presents will require an approach that goes beyond manual processes, electronic prior authorization or even partial prior authorization automation. It requires a fully automated and orchestrated solution that operates in real-time; directly integrates into electronic health records, lab information management systems, and revenue cycle solutions; connects directly to most payers, and can automatically synch prior authorization rules as part of a comprehensive rules library. 

To learn more about how Myndshft can streamline and automate your prior authorization process, contact us for a demonstration.

See also:

The Twin Challenges of Claim Denials and Prior Authorizations

Diagnostics Lab Execs Reveal Their Biggest Revenue Cycle Challenges

Why Billing is Complex at Diagnostics Labs