Prior authorization (PA) is a process that some insurance companies and healthcare providers use to determine if a particular medical service, treatment, test, or medication is covered under a patient's insurance policy, and if covered, obtain authorization for the service. Prior authorization is often required for expensive or high-risk medical procedures, medications, or treatments and typically requires the healthcare provider to submit a request to the insurance company for approval before the service or treatment can be given to a patient. In turn, the insurance company reviews the request and determines whether the service or medication is medically necessary and covered under the patient's plan.
The goal of prior authorization has always been to control healthcare costs and ensure that patients receive appropriate and medically necessary care. However, patients have many different insurers and plans most of which have different electronic systems or phone/fax processes providers must use to obtain prior authorizations plus the different insures might have different approval criteria complicating the process. Over the years, the process has proved to be time-consuming and frustrating for healthcare providers, insurers and patients alike, especially if requests are denied or delayed. Prior authorizations began as a cost containment effort for payers, attempting to validate that services being ordered by healthcare providers were medically necessary.
As a way to greatly reduce the unintended administrative burden, standardizing and automating the prior authorization process can provide forward-thinking solutions that have a variety of benefits for the healthcare experience. This automation is designed to digitize the prior authorization process by integrating electronic health records (EHRs), insurance information, and clinical decision support tools. This technology can automatically check the patient's insurance coverage, clinical guidelines, and other relevant information to determine whether a medical service, test, or medication requires prior authorization or not. The automated systems then can submit the request and often retrieve an answer in seconds or notify the provider that it was received and being reviewed.
Three ways in which automating the prior authorization process can benefit the healthcare experience at various stages of the care cycle.
Healthcare Staff Can Spend More Time with Patients
Improving the lives of patients is why many chose the medical field as a profession. However, when providers and their staff are bogged down with finding insurance requirements, submitting forms, and advocating for prior authorization requests on the phone, they do not have as much time to spend with their patients and accessibility to care can become limited.
According to a 2022 AMA survey, a physician's practice completes approximately 45 prior authorization requests per week and 88% of physician's described the burden associated with prior authorization as high or extremely high. By automating the PA process, requests made to insurance companies can become more efficient and providers and their staff can get back to doing what they feel called to do, treating members of their community so they can lead a healthy life.
Patient Experience and Outcomes Are Improved
Prior authorization is a widespread practice in healthcare for when high-risk procedures and prescriptions are deemed necessary by a physician. Despite it being common, receiving a quick approval can make the difference between a positive or negative patient outcome and experience. According to the AMA survey, for patients whose treatment required prior authorization, 94% reported that there was a delay in care.
This slow turnaround can not only impact how quickly a patient can receive the care that their ailment requires, but it can lead to some patients abandoning treatment all together. An estimated 80% reported in the survey that a complicated prior authorization process can sometimes lead to treatment abandonment. By automating authorization requests, physicians can provide care to their patients faster and have a higher success rate of their patients participating in their treatment plan in its entirety.
Revenue Collection for Healthcare Providers is Maximized
Prior authorization must be obtained to ensure payment for many high-cost and high-risk procedures. Automating much of this burdensome process can help to maximize revenue collection while decreasing the burden on providers, as well as the burnout it causes for their clinical and administrative staff. An automated solution can reallocate resources that provide more direct patient care, including essential case management in support of population health.
By streamlining processes through automation, the healthcare industry can reduce the time and cost associated with administrative transactions. According to the CAQH 2019 Index, it was reported that of the $350 billion dollars widely cited as the cost of administrative complexity in the US healthcare system, $40.6 billion is spent on eight administrative transactions, including prior authorization. Of that, the industry can save $13.3 billion (about $41 per person in the U.S.), or 33 percent of existing annual spend, by transitioning to fully electronic processes.
Developing Tailored Solutions with Technology
At Signature Performance, we provide proven systems and tailored configurations to break down barriers and reduce administrative burden within the healthcare system in the U.S. We improve not only our clients’ business, but the entire healthcare industry by finding better ways to leverage AI technology, forward-thinking individuals, and industry-leading processes to identify pain points in the care cycle in the private and public healthcare sectors. By automating the prior authorization process, providers can submit PA requests, receive the status, and get near real-time approval results. This would save the providers and their staff time, simplify the PA process, and reduce if not eliminate delays in response that can negatively impact the patient outcome.
To learn more about our service portfolios at Signature Performance, contact our team today!