The prior authorization process in healthcare reimbursement has grown out of control: it’s negatively affecting both healthcare operations and quality and timeliness of care.
Virtually every healthcare organization is experiencing this burden, often in the form of increased administrative burden and more “busy work” for providers.
Despite the challenges, healthcare practices have reason for optimism: a new generation of tools, tactics, and initiatives are pushing back against these out-of-control processes, pointing to a future that’s more focused on patient care and less on jumping through insurers’ hoops.
What Is the Prior Authorization Process?
Prior authorization is the process that providers (and sometimes patients) must walk through with an insurance company/payer to receive a clear answer on whether the payer will cover a given treatment or medication.
From the insurers’ point of view, prior authorization is a tool for controlling costs by reining in medically “unnecessary” procedures and steering patients toward more affordable drugs. But if you’re a provider or a patient, this process rarely — if ever — seems helpful.
Adverse Effects of the Prior Authorization Process
The trouble with the prior authorization process is that there is no single set prior authorization process. Every payer has different expectations, and they typically don’t provide those up front. So healthcare providers are forced to guess, more or less, which pieces of evidence will result in a preapproval.
One large insurer states that the preapproval process takes “just” 5 to 10 business days, but that’s how long it takes for an initial response, which could be a denial or a request for more information. Back and forth the request goes; meanwhile, the patient is delaying care or medication as they await an answer.
The adverse effects of this process can be divided into three categories: the effects on medical practices, on patients, and on medical care itself.
For medical practices
Medical practices have to play the prior authorization game on behalf of their patients, and it’s incredibly time-consuming and error-prone. Insurers don’t generally disclose what they need, or at least they don’t do it well or clearly.
It may even be unclear which procedures or medications require prior authorization.
Physician Jack Resneck Jr., speaking to the American Medical Association (AMA), describes the problem:
“It’s really frustrating for doctors, just as it is for patients — [the prior authorization] process is really opaque and unpredictable. Oftentimes, we don’t even know until the patient gets to the pharmacy whether different treatments will be covered and which ones will require prior auth.”
Medical practices may even need to devote entire staff positions to negotiating prior authorizations, driving up the cost of sustaining a practice and thereby the cost of care itself.
For patients
Patients don’t have it any easier. If it’s this difficult for practitioners to navigate the prior authorization labyrinth, patients hardly stand a chance. They can call their insurers and seek prior authorization, too, but they encounter the same web of requirements and likely can’t provide the necessary information without their health care provider’s assistance.
Patients often misplace blame for the frustrations, assuming that your practice is to blame for any failure to obtain prior authorization.
Dr. Resneck again: “Patients are often surprised to learn that there is nothing the physician can see in their computers or electronic health records that would predict which medications a patient can actually get under their insurance.”
For patient care
The prior authorization process is also harming patient care itself. Instead of examining patients and moving unhindered toward the treatments and medications best suited for the condition, providers are mentally navigating potential preauthorization hurdles:
“Treatment x would be best, but most insurers put up a fight. Even if I got it approved, it would take months, and this patient doesn’t have months to wait. Would treatment y be nearly as effective? Which one does this particular insurer tend to prefer again? Will that one work here?”
It’s far from ideal when providers must devote so much mental energy and focus to questions like these.
Additionally, we’re seeing “prior authorization creep” throughout the industry. Where prior authorization was originally designed to cover a small number of very expensive drugs and experimental procedures, some insurers have expanded it, requiring prior authorization for the generics they used to recommend. It almost seems as if insurers are using prior authorization as a delay-and-deny tactic more than a legitimate cost control.
So patient care suffers because physicians are constantly navigating through a precarious situation and because the sheer volume of prior authorizations creates delays between diagnosis and treatment. If, in the best case scenario, it takes a week or two for an insurer to make an initial decision, patients could end up waiting far longer to get that final answer.
Solving the Prior Authorization Process
We see three avenues where the industry is beginning to solve the problems created by the prior authorization process: tech-driven solutions, industry initiatives, and greater automation.
Technological solutions
Some technological solutions aim to streamline and systematize processes within prior authorization workflows. Electronic prior authorization (ePA) is one example, seeking to replace numerous phone calls and scattered paperwork with a defined electronic system and workflow.
ePA is a process established by the National Council for Prescription Drug Programs (NCPDP) SCRIPT Standard. The goal is to create specific, measurable criteria for prior approvals that can generate real-time approvals when conditions are properly met.This system holds great promise: if even 20% of prior approvals switch from “best-case one to two weeks” to real-time approval, we’ve made great strides.
Industry initiatives
The AMA has worked with a number of medical societies, provider associations, and patient representatives to create a set of 21 reform principles surrounding prior authorization. So far, these reform principles have not yet resulted in significant reform, but progress is ongoing.
Additionally, many states have begun to attempt to tackle the issue. We’re hopeful that this issue will be addressed at a policy level.
Automated processes
Last, wherever possible, providers should implement automated processes to handle prior approvals. The ePA system is one example of this, though others are possible for organizations using the right set of modern tools.
Automation means fewer hands on the data, less time spent working prior authorizations, and ideally more approvals. But you’ll need the right modern software tools to do this well.
How AC3 Can Help
AC3 is a combined software and service solution that assists medical practices throughout the revenue cycle, including managing prior authorizations, denials, and underpayments efficiently and comprehensively. AC3 delivers visibility into your revenue cycle, giving you the opportunity to identify, solve, and even automate payment and approval issues at a scale that just isn’t possible using manual processes.
Interested in seeing AC3 in action? Schedule a demo now!
