One area in the healthcare payment lifecycle still lagging due to manual processes, and antiquated systems is approvals for prior authorizations (PA). While the PA system for utilization review was intended to streamline care and reduce healthcare costs by reducing unnecessary procedures, tests, and medications, in practice, it has become a nightmare burden resulting in physician burnout and patient care abandonment.

Recently, the Council on Affordable Quality Healthcare (CAQH) issued a report stating that while other processes in the overall billing workflow have adopted efficiency-gaining procedures, PAs are notoriously slow and cumbersome. With claim submissions automation reaching over 90% industry-wide and claims status inquiry and payment at over 70% and 65%, respectively, PAs fall far short with only 12% computerized today.

Potential Cost Savings Associated with Prior Authorization Automation

The potential cost savings to process PAs through an automated system is not inconsequential and deserves serious consideration when addressing today’s operational and expense savings challenges. According to CAQH, processing a PA manually has an associated cost on average of $6.61 per provider. Compare that to electronic processing, which averages $2.80 per provider, and the savings can be enormous.

How an Automated Prior Authorization System Works

Recently 83% of the respondents to a Medical Group Management Association (MGMA) survey identified PAs as the single most burdensome administrative process their providers and practices have to navigate. Walking step-by-step through an automated PA approval process using one of today’s artificial intelligence (AI) assisted platforms, there are demonstrable time (and frustration) savings to be recognized:

  • Determination of whether a PA is required, or not, through machine learning and AI-driven software
  • Electronically submitting the PA to the payer for approval
  • If approved, the PA is returned in real-time so that the patient can be scheduled, and PA committed to the EHR/EMR
  • Automated status checks allow rejected or complex approvals to be updated and tracked in real-time
  • In addition, many automated PA software platforms incorporate insurance verification and benefits eligibility, as well as specialized modules such as Clinical Decision Support Mechanism (CDSM) for radiology and cardiology to ensure appropriate use criteria were utilized to identify the procedure.

Human specialist intervention is only required for outliers and emergent requests, freeing up administrative staff for higher use functions, like patient education, patient portion upfront collections, and improvements to the patient experience. There is also significant evidence that claim denials can be greatly reduced, and revenues increased with this type of proactive PA program.

PA process improvement is critical to today’s healthcare industry. It has the potential to bring substantial cost savings and improved revenue capture, along with addressing concerns about the mounting physician shortage. New potential medical candidates may reconsider their options if they see a significant reduction in the administrative burden that has been accepted as an insurmountable roadblock in the profession.

Regardless, waiting for legislative relief has not produced any tangible results thus far and taking a proactive stance by automating the PA process not only increases the current operations of a practice or hospital, but positions that organization as regulations continue to evolve.

Contact us to learn what efficiencies can be gained with automating your prior authorizations and insurance verifications.