Don’t Risk Orthopedic Practice Profitability with Manual Prior Authorizations

The very nature of orthopedic practice with its high volume of non-emergent surgical procedures, advanced imaging requirements, and specialized medications and rehabilitation techniques puts it squarely in the crosshairs of insurance payers for increased monitoring and oversight.  That oversight typically comes in the form of prior authorization (PA) requirements that are mandatory as insurance companies try to manage healthcare costs.

Pledging support for relief legislation in Congress, the American Academy of Orthopedic Surgeons (AAOS) joined with eight other medical specialty societies to form the Regulatory Relief Coalition that targets undue burdens on physician practices, specifically PAs.  Their guidance hopes to focus on the following:

  • Establishing automated and electronic PA processing
  • Minimizing routine service PA requirements
  • Mandating that qualified medical personnel review requests
  • Acquiring regular reports from insurance payers on their use of PA and their rates of denial or delay
  • Prohibiting PAs for medically necessary services performed during authorized surgeries or procedures

The Cost of Manual vs. Electronic Prior Authorizations

With only 13% of physician practices using fully electronic PAs, there seems to be an extraordinary upside to be gained by converting from a manual system.  The 2019 CAQH Index “Conducting Electronic Business Transactions:  Why Greater Harmonization Across the Industry is Needed” estimates that the industry cost per manual PA is $14.24, while a fully electronic PA would cost $1.93; a savings of $12.31 per PA processed.

The possibilities are staggering from a financial sense, but don’t forget to consider the human impact.  With electronic PAs, the business office staff would no longer be performing the burdensome task of preparing, submitting, and following up on PAs. It would be free to participate in higher-level and more patient-centered tasks.  Equally, or perhaps even more importantly, the patient experience would be streamlined and elevated as well.

Why the Slow Adoption of Electronic Processing?

Even though the expectation for use of electronic PAs has been in place for almost 20 years through the HIPAA Electronic Prior Authorization Standard, industry adoption has been remarkably slow and is much less than other federally mandated electronic transactions, i.e., insurance verification, claims submission.  Speculation on causes ranges from decreased provider awareness to resistance by business department staff who fear obsolescence.

Several Key Reasons Why Automation is More Important Than Ever

The Patient Experience

As patients become more active in the financial aspect of healthcare due to their increased responsibilities, their expectations keep increasing.  Providing solid customer service to patients, and referring providers, is a top priority for orthopedic practices as healthcare dollars continue to tighten, and consumerism takes hold of patient behavior.

Ever-Increasing Requirements

Over the last several years, it is estimated that PAs have increased by over 27% industry-wide, and very likely much more for a PA-intensive specialty like orthopedics.  And while this unabated expansion seems to have drawn the attention of providers, patients, and lawmakers, little actual change is happening, and, in fact, more increases are expected as surgical procedures are utilizing advanced techniques and technology.  With care delivery expanding at such a rapid pace, Insurance companies will turn even more to PAs as a way to control expectations and costs.

The Advent of Artificial Intelligence in Prior Authorization Processing

While the intention to automate PAs has been around for a long time, it hasn’t been until the last several years that artificial intelligence (AI) has been focused on reducing the mundane and repetitive tasks that make PAs such an administrative burden.  With AI-driven technology, PAs can be processed and submitted in real-time with follow-up and rework monitored independently.  What used to take several days to weeks can be accomplished from start to finish in a couple of hours or less.

Despite the longstanding efforts of industry stakeholders and government officials, PA requirements are continuing to expand, and their impact felt throughout the healthcare sector.  It seems prudent to bring the advanced automation available today into the equation allowing real-time processing to significantly reduce the administrative burden while bringing additional revenue to the bottom line.

Reach out to learn more about increasing orthopedic profitability through best-in-class automation solutions today.

About the Author

Infinx
Infinx Healthcare provides innovative and scalable payment lifecycle solutions for healthcare practices. Combining an intelligent, cloud-based platform driven by AI with our trained and certified coding and billing specialists, we help clients realize revenue, enabling them to shift focus from administrative details to billable patient care.

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