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The impact of the prior authorization process

What is prior authorization?

Prior authorization is approval from a health plan before a patient can obtain a medical service or fill a prescription in order for the service/prescription to be covered by a patient’s health plan. 

The prior authorization process is sometimes given other names such as prior auth, PA, preauthorization, precertification, prior approval, prior notification, prospective review, predetermination or prior review. No matter what it’s called in healthcare, both medical and prescription prior authorizations can still be a giant headache for any practice. 

How do medical and prescription prior authorizations affect practices and patients?

Oftentimes, a provider and patient won’t know prior authorization is required until the patient attempts to fill a prescription at their local pharmacy. Many pharmacists and patients wind up calling practices for prior auth that they likely won’t get immediately. 

The American Medical Association (AMA) found that 91% of patients experience at least some delay in receiving care due to lengthy prior auth procedures. And according to an MGMA stat poll, 94% of physicians say that prior auth can delay access to necessary care. 

In fact, 28% of physicians in an American Medical Association (AMA) survey said, “the prior authorization process required by health insurers for certain drugs, tests and treatments has led to serious or life-threatening adverse events for patients.” It turns out that 16% of physicians reported that prior auth led to patient hospitalization because of the delay.

Submitting a prior authorization can be time intensive with no shortage of miscommunications. Pharmacists or doctors may forget or neglect to start the requests, fax machines may malfunction, or phone conversations with an insurance provider may not result the way you’d like. 

A recent AMA survey found that practices complete 40 prior authorization requests per physician per week. Processing these requests takes approximately 16 hours per week, so it comes as no surprise that 85% of physicians described prior authorization as a high or extremely high burden. 

Sadly, that burden is only getting worse. Eighty-four percent of providers say the number of medical services that require prior auth has increased, according to a survey by WEDI, a nonprofit organization that studies the use of health IT to create efficiencies in healthcare information exchange. 

Not only has the number of services that require prior authorization increased, but 90% of healthcare leaders reported that prior auth requirements have also increased, according to an MGMA stat poll.

Can technology help with the prior auth process?

It turns out that 62% of providers feel they do not have the technology to evaluate whether a prior authorization is required for a medical service, diagnostic test or medication without initiating a prior authorization request, per WEDI survey.

Fax and telephone are still the most common ways that prior authorization takes place, even today, when there are automated ways to provide prior authorization. 

Electronic prior authorization (ePA) is an automated prior authorization solution that can save a practice hours and even days of work and is available with most EHRs. With this solution readily available, the patient can leave an office with a valid prescription, improving patient care.

Even though ePA would potentially save providers $355 million annually from a complete shift to electronic PA processes, according to the Council for Affordable Quality Healthcare (CAQH) report, medical plans were slow to adopt electronic prior authorization as compared to other administrative transactions in 2019. That being said, sending prior authorization requests electronically through payer portals has increased in popularity. 

What’s being done now for the future of the prior authorization process?

Last year Anders Gilberg, senior vice president of the Medical Group Management Association  (MGMA), said in a written statement:

“Practices should not be forced to rely on fax machines to complete manual prior authorizations when health plans could modernize the process.” He continued, “The federal government needs to streamline prior authorization by requiring a national automated approach to minimize administrative costs and delays in patient care.” 

The Fast Prior Authorization Technology Highway initiative aims to utilize technology from Availity and Surescripts to speed up requests and responses for prior authorization requests. This initiative is captained by the insurance industry group America’s Health Insurance Plans and several insurers including Anthem, Cigna and WellCare. Part of this initiative involves volunteers working with insurers to incorporate new processes into existing technology. 

What technology can help?

Besides adopting ePA into your prior auth/daily workflow, you can also implement other technologies that can help you increase revenue in 2021. The Council for Affordable Quality Healthcare found that by fully adopting electronic processes from the list of transactions you can find below, the industry can reduce waste by $13.3 billion annually, a third of it being administrative spending. A total of $9.9 billion can be saved by medical plans and providers. 

Those eight transactions are:

  1. Eligibility and benefit verification
  2. Claim submission
  3. Attachments
  4. Coordination of benefits
  5. Claim status inquiry
  6. Claim payment
  7. Remittance advice
  8. Prior authorization

Is there one solution that can be automated? 

Rivet is a reimbursement software that gives you the big picture of what’s going on in your practice with payer contracts, fee schedules, denials and underpayments. You can also check eligibility and provide accurate up-front patient cost estimates before services are rendered. The Rivet team will help you aggregate your fee schedules and input your claims data to enable you to increase revenue and decrease A/R days.  

For more information about the tools Rivet provides, schedule a Rivet demo.