Medical plans established prior authorization (PA) processes to make sure they only cover medically necessary patient care in a cost-effective manner. PAs can prevent wholly inappropriate service utilization or, more commonly, ensure that first-line treatments are attempted before care is escalated to more invasive or risky therapies. But in their current form, these nonstandardized, manual processes present challenges for the smooth processing of PAs, including physician burnout, huge costs to health care, delays or absence of appropriate care for patients, and a suboptimal stakeholder experience.
All stakeholders have to spend an enormous amount of time managing information for decision-making, necessitating the alignment of many resources to make it work. Electronic prior authorization processes can expedite the time from submission to decision-making, improving the ability to meet Centers for Medicare & Medicaid Services time frames (seven days for standard requests, 72 hours for expedited).
Transformation benefits
Although advanced technology such as automation can improve PA workflows, only 21% of prior authorizations are fully electronic, according to the Council for Affordable Quality Healthcare’s 2021 CAQH Index.¹
But it doesn’t have to be this way.
Automating administrative processes could mitigate some of the current challenges by enabling data interoperability and improving experiences for both members and providers. If seamless electronic communications were within reach, routine procedures like an MRI order could get a near-real-time response from the payer. Right away, patients would know what comes next in their treatment and leave the provider’s office feeling informed and cared for.
Digitizing the process would also greatly diminish providers’ administrative burden. The impact would be so significant that the medical industry could save $437 million a year, according to the 2021 CAQH Index.² Savings would result from the following:
- A reduction in administrative costs
- An increase in net promoter scores from providers and members
- Faster access to patient care due to accelerated decision timelines
- Lower denial rates due to transparency in coverage criteria
Policy imperative
Mandates from Washington also necessitate changes to current PA processes. If finalized, two recent proposals from the Centers for Medicare & Medicaid Services would place new requirements on Medicare Advantage organizations, Medicaid managed care plans and Children’s Health Insurance Program (CHIP) managed care entities, state Medicaid and CHIP Fee-for-Service programs, and qualified health plan issuers on the Federally-facilitated Exchanges to streamline processes related to prior authorization. This includes:³