Manual prior authorization workflows represent one of the most tedious and expensive aspects of the healthcare revenue cycle. However, despite access to automated prior authorization software, only 31% of providers use electronic prior authorizations, according to the Council for Affordable Quality Healthcare (CAQH). The CAQH predicts that providers who switch to automated prior authorization software could not only gain back valuable staff time, but also see significant cost savings.
What is prior authorization and why is it important?
In healthcare, prior authorizations are when providers and payers decide in advance if a patient's insurance plan will pay for a specific treatment. Prior authorizations are crucial to reimbursements and keeping revenue cycles on track. Providers that offer services without prior authorization are unlikely to receive reimbursement from the patient's insurer. This can result in unpaid medical bills, leaving billing teams chasing patient collections or writing off bad debt.
During the prior authorization process, providers submit a rationale for a proposed treatment to the payer. The request is approved or denied based on certain criteria, including payer policies and medical necessity. The payer may reject a prior authorization request if the treatment or service isn't covered under the patient's insurance plan, if it's not considered medically necessary or if a more affordable alternative is available. Simple paperwork errors, like missed deadlines or incomplete documentation when submitting a prior authorization, may also result in a denial.
Challenges of manual prior authorization processes
Despite the importance of prior authorizations in the revenue cycle, tedious manual prior authorization processes present challenges for many healthcare providers. Some of the key obstacles providers face using manual prior authorization include:
Heavy administrative burden
Healthcare providers spend a significant amount of time starting, completing and revising prior authorization paperwork. An AMA survey found that 86% of physicians say prior authorization has increased healthcare resource usage. At the same time, additional AMA data reports that providers spend around 13 hours working on 39 prior authorizations each week, and nearly one-third of providers report that these prior authorization requests usually end up being denied.
Changing payer policies
Keeping up with multiple payers and ever-evolving payer policies adds strain on staff and ultimately results in prior authorization denials. Changes are often unannounced, making it hard for providers to stay on top of updates. As a result, prior authorization submissions aren’t always accurate and may be based on outdated rules. This can lead to instant rejection and wasted time correcting and resubmitting requests.
Inefficient workflows
Prior authorization requirements can be complicated, especially when providers are juggling different payers, standards and service lines. Coping with these complexities often puts strain on manual systems, especially when multiple staff and notetaking methods are involved. Staff members may each get different pieces of information from payer websites (or over the phone) and not have the ability to benefit from their shared knowledge efficiently. Navigating communication hurdles and rapid payer information changes can result in workflow inefficiencies that snowball quickly.
How prior authorization software can improve efficiency
Replacing manual prior authorizations processes with automated prior authorization software can help providers improve efficiency. Here are some key ways providers benefit from automated prior authorization solutions, like Experian Health's Authorizations.
Reduces manual interventions: This solution limits guesswork, human errors, and misinterpretations by automating data originating from the EMRs. Automation saves staff time and energy and prevents frustration.
Stays current with latest payer policies: The prior authorization system stays up-to-date with the latest regulations and payer requirements. Automatic updates provide staff with the most current information, eliminating the need for staff to visit multiple payer websites or cross-check data by hand.
Provides real-time updates: Providers can promptly clear authorizations for service by proactively identifying authorization status as pending, denied or authorized. This allows physicians to make timely treatment plans and for patients to avoid disruptions in care.
Reduces risk of denials: Through automation, electronic prior authorization software ensures the accuracy and completeness of submissions by automatically checking with payers and vendors to validate that the authorization is on file. Payers and providers also get a shared view of account information, reducing the need for prolonged discussions about the status of authorization and rework requests.
Key features to look for in prior authorization software
When implementing prior authorization software, look for a solution that offers a wide range of features to automate and streamline the prior authorization process. Experian Health's prior authorization solution, Authorizations, for instance, offers healthcare providers the following key features:
Real-time knowledgebase: Access to up-to-date prior authorization requirements and criteria in the National Payer Rulesets
Submissions support: Removes guesswork and directs users to the correct payer portal based on procedure
Automated inquiries: Automates the prior authorization payer inquiry process
Enhanced workflow: Dynamic work queues display status and guides users through next steps
Postback: Allows users to easily send authorization status, number and validity dates to health information systems (HIS) and practice management systems (PMS)
Image storage: Receives and securely stores payer responses in an integrated document imaging system
Reconciliation: Provides insights into authorization variations and helps resolve them, so staff can take proactive steps to prevent denials and appeals
Integration with electronic health records and billing systems: Why it matters
Providers often choose a prior authorizations platform that seamlessly integrates with existing Electronic Health Records (EHR) and billing systems for maximum efficiency. Solutions like Experian Health's automated prior authorization management tool, Authorizations, easily adapt to existing processes. This eliminates the need for a complete workflow overhaul and minimizes the learning curve for staff.
Embracing prior authorization software for a more efficient revenue cycle
Revenue cycle leaders who implement prior authorization automation strategies could see significant savings – $494 million annually as an industry, according to CAQH data. Claims and revenue management processes are often complex and outdated, costing healthcare organizations time and money. High denial rates and slow reimbursements can hurt cash flow and get in the way of financial stability. Automating prior authorization can reduce claim denials, speed up reimbursements and improve the bottom line.
Learn more about how Experian Health's electronic prior authorization software, Authorizations, uses automation to achieve greater consistency and efficiency for healthcare organizations.
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