Prior Authorization: How a Real-Time, Automated Solution Benefits Providers

Prior authorization is a headache for patients and providers. It’s a time-consuming process: physician offices spend hours getting approvals from health plans to cover medications and specific medical procedures.

The idea behind prior authorizations is cost savings. Getting authorization beforehand should ensure only appropriate procedures and medications are provided to patients.

The flipside is that it takes a lot of time and money to implement.

The process takes time away from providers who submit the prior authorization paperwork, time for payers to adjudicate the request and respond with an answer, and a fair amount of money from providers.

A survey by the American Medical Association of 1,000 members found 75 percent said seeking prior authorizations put a high or extremely high “burden” on the practice. The burden presents itself as the number of prior authorizations completed each week (a mean of 37 prior authorizations) and the time it takes to complete them weekly (a mean of 16 hours).

At the other end of the continuum is the amount of extra time it takes for patients to receive care as the result of the process. The same study found 90 percent of providers reported a treatment delay caused by the activity. That’s because 60 percent of providers said it took at least one business day to receive a reply; 26 percent reported the OK was received after 3 or more business days.

In addition to delays, providers spent more than $2,000 to upwards of $3,400 every year working on prior authorizations, according to the Journal of the American Board of Family Physicians.

Prior authorizations are likely not going away anytime soon. So what can be done to compress the process from beginning to end? Some providers, a small 7 percent, say they receive approval in less than one hour.

Automated Authorization

What if we could increase that number by automating the process? We’re partly there today with 47 percent of health plans offering a combination of web portals and interactive voice response systems. Even so, both methods are highly manual and clumsy.

And payers aren’t saving much money from the manual process. In 2013, the average estimated cost per manual transaction was $3.95 for health plans, according to CAQH. Providers, as mentioned earlier, fare worse with the cost being “$5.20 for automated and $18.53 for manual transaction(s),” according to the report. During 2013, CAQH found there were 130 million prior authorizations sent to payers. A full 110 million were handled manually, which is defined as phone, fax or paper statements.

Using automated solutions, prior authorization information could be passed electronically directly from the provider to the payer. Much in the way claims are handled by a clearinghouse, prior authorizations could be routed through a solution that matches the incoming request to rules set by the payer to ensure accuracy. Items meeting payer rules could be automatically adjudicated with approval sent back to the provider in minutes. Errors or others issues would be automatically flagged and returned to the provider for correction.

A completely automated prior authorization solutions benefits providers by helping to ensure accuracy throughout the process while freeing staff to work on other mission-critical responsibilities, which can help increase overall practice efficiency.
 
Blog Comments

Comments
Donna Reyes
We are interested in setting up an account specifically for prior authorizations.
9/24/2018 12:42:46 PM

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