Initiatives: Healthcare and Life Science Digital Optimization and Modernization
COVID-19’s economic fallout will depress U.S. healthcare payers’ commercial membership. The report entitled “7 Ways Payer CIOs Can Grow Profits in Medicare Advantage, Managed Medicaid, and Individual Exchange Markets,” by analyst Bryan Cole reviews how the economic fallout from COVID-19 has severely damaged U.S. healthcare payers’ patient membership.
- The COVID-19 pandemic will compress payers’ financial margins by lowering commercial group
membership. Many displaced employees will move from commercial group lines into managed
Medicaid and Affordable Care Act (ACA) individual exchange coverage.
- The main government health programs of Medicare Advantage, managed Medicaid and
individual exchange have become reliable sources of membership volume and profits for most
payers. However, many payer leaders believe their performance in these programs is already
optimized — leading to the misconception that there are no new profit maximization
opportunities now when they are needed the most.
Automate Prior Authorizations
In times of financial stress, payer CFOs frequently ask chief medical officers to reduce medical
service utilization by implementing stricter clinical approval guidelines. Denying more of providers’
requests to perform medical services lowers claim costs in the short term through brute force since
fewer approved services means fewer paid claims. But payers cannot be effective in the long term
by using a publicly maligned managed care tactic from days past. We argue that prior
authorizations play an important role in protecting members from excessive billing or unnecessary
care (see “Healthcare Collaboration Point for CIOs: Prior Authorizations”). We also believe that prior
authorizations included as part of a holistic care management function, along with medical
shopping and decision support, enable members to select care providers and services that best
align with their personal needs and cost-sharing constraints. However, your prior authorizations
process must be effective to yield value to members and to support your business in the long term.
Simply raising the bar for medical necessity will only alienate members and drive providers to
repeatedly resubmit their requests.
Make your prior authorizations effective through automation. Using artificial intelligence (AI) and
robotic process automation (RPA) tools, prior authorization automation promises to quickly
dispense with incomplete or inaccurate submissions while seamlessly approving routine requests
that are low risk. This gives payers’ clinical teams the time to focus on remaining requests needing
case management, such as high-cost or preference-sensitive procedures. AI and RPA bring
intelligence into prior authorizations, allowing you to streamline processes and deploy medical
policy updates at scale. The result will be lower internal processing costs, more exact targeting of
scarce utilization management staff and ultimately lower claims costs while also improving
provider experience and collaboration.
Representative prior authorization vendors: Experian Health, Hindsait, ImagineSoftware, Infinx,
PracticeSuite, PriorAuthNow, Secure Exchange Solutions, TransUnion, Waystar (formerly
Recondo), XSOLIS, Zoll Medical (formerly Payor Logic)
Click here to read the full report.