Healthcare providers could be losing up to $265 billion each year on avoidable administration costs. A recent investigation by the Washington Post and McKinsey & Company found expensive inefficiencies in several areas of healthcare expenditure, with financial transactions such as prior authorizations among the main culprits. How can healthcare organizations adjust to streamlining prior authorizations?
Prior authorizations (or pre-authorizations) are intended to provide financial certainty to patients and providers, by confirming in advance that a payer will cover the cost of a particular test or treatment. However, securing pre-approval isn’t always a tidy process. The criteria are complicated and frequently change. In April this year, the American Medical Association reported that 85% of physicians found the burden associated with prior authorizations to be very high. The consequences are severe – hold-ups and errors can lead to delayed care, poorer outcomes for patients, and more unnecessary costs for providers.
Securing pre-authorizations has always been challenging, but as with many healthcare operations, the COVID-19 pandemic exacerbated the problem. Experian Health’s State of Patient Access 2.0 survey revealed that more than half of providers find it difficult to keep track of changing pre-authorization requirements. Two-thirds expect to encounter roadblocks when seeking authorizations for rescheduled elective procedures. In fact, prior authorizations have overtaken patient payments as the biggest area of concern when it comes to collections and reimbursements.
In our “Interview with the Expert,” Ellie Henry, Experian Health’s VP of Implementation, discusses the challenges around pre-authorizations and offers some immediate actions healthcare providers can take in response.
Watch the interview below:
Why are providers increasingly concerned about pre-authorizations?
Pre-authorizations have been a hot topic for a while, but Experian Health’s State of Patient Access surveys, taken six months apart in November 2020 and June 2021, show a significant increase in provider concerns. Is this purely down to the “pandemic effect,” or is there more to it? Henry suggests that while the pandemic has been the main driver of recent authorization challenges, manual processes and changing payer rules have played a major role, too:
“Hospitals had to restructure operations during the pandemic, which led to a lot of care being rescheduled. But it wasn’t always clear if existing authorizations would apply to that rescheduled care, which led to more reworking. Payers were continuing to adjust their rules, and understaffed organizations had to do more with less, which made it even harder to function effectively.”
Many states also released their own pre-authorization requirements. For example, in September 2021, New York released an executive order to suspend prior authorizations for 30 days. While this may have been intended to ease pressure on staff and accelerate patient care, it also raised numerous questions. Providers had to determine if preapproval was needed for care that was planned during these 30 days or deferred until later and whether these changes overruled national payers’ requirements.
How should providers address current pre-authorizations challenges?
Henry says that providers can mitigate these challenges and focus on streamlining prior authorizations by dedicating limited resources to the most important problems first. This means using technology and automation to alleviate pressures on staff:
“Providers need to streamline hand-offs and eliminate accounts that don’t need to be touched. With the right automation and technology, you can eliminate manual work and optimize workflows to manage demand. No matter how good you are, there’s always room to improve.”
The growing administrative burden, exacerbated by increasing patient volumes, is an uncomfortable equation for healthcare organizations with reduced workforces. The traditional methods for managing patient accounts and checking for changes in payer policies are no longer sufficient. Instead, providers should look to automated prior authorization solutions that can ease the strain and ensure that more accounts are processed faster and more accurately. These should encompass both back-end automation and patient-facing digital tools that support self-service and reduce call volumes.
What new opportunities lie ahead for streamlining prior authorizations?
In the longer term, patient volumes will continue to increase as rescheduled care ramps up, and as patients begin to think about healthcare “maintenance” again. Providers have several options available to them to manage the pre-authorizations that will follow suit.
Henry suggests that a good starting point is to invest in the right technology:
“Technology can reduce manual tasks and keep the process manageable. The more tasks you can streamline and automatically update within your system, the better. Reach out to technology vendors and ask if their tools can help to make the process more efficient.”
With prior authorization software, payer rules can be automatically updated so staff always know they’re looking at the latest information and don’t need to input data by hand. For example, Experian Health’s SmartAgent feature can sign the user into the appropriate payer website and auto-fill relevant patient information, saving time and reducing the risk of error. Dynamic work queues can help staff navigate the process with confidence and reconcile all the relevant data points within each patient’s specific situation.
Henry also recommends doing knowledge-based checks to determine whether a patient’s planned procedure needs pre-authorization. Having records and supporting documentation in place can help handle rework and prevent errors from occurring in the first place. Engaging with payers to build stronger relationships is another strategy to support smoother authorizations. Again, reliable solutions and digital tools can simplify each of these tasks.
Watch the full interview and download the State of Patient Access 2.0 white paper to find out more about how automation and digital tools can ease the burden and help with streamlining prior authorizations. By streamlining prior authorizations, providers can reduce unnecessary costs and deliver faster, high-quality care to patients.Download now