Over a quarter of prior authorization requests are denied by insurance companies. This adds a substantial administrative burden on the providers as well as induces care delay.
In the AMA survey of physicians, 90% [1] of them are aware that prior authorization leads to an increase of overall healthcare resource usage, 44% of them noted that often or always.
Here’s why, according to the surveyed[1] physicians:
- 69% admitted that primary therapies rarely succeeded because of step-therapy necessities.
- 68% of respondents said that prior authorization restricted them to making extra office visits.
- 42% reported an increase in visits to clinics or emergency departments within the same week of receiving the call.
- 29% said that it led to hospital admissions.
Doctors said that even though prior authorization is meant to ensure that costs are kept down and resources conserved, what that does is discourage people from seeking medical care when they should. These conditions often result in deterioration of other health complications which demand either urgent or emergency attention, hence increasing general health expenditure.
Understanding the Prior Authorization Burden
More Use in Hospital and Health care Facilities
Though prior authorization is still among the four least commonly adopted medical transactions, there was a three-point increase among those adopting it. Still, the steady growth of prior authorization has not decreased the opinion about it as one of the most complicated administrative activities for providers.
Larger Medical Transaction Throughput
Prior authorization volume continued to increase by 23% after dropping during the covid-19 pandemic. This increase was across all modes of submission but with the use of electronic prior authorizations growing by 61%.
Rising Medical Expenditures
Over the past year, use of prior authorizations in the medical field rose by 30%, or $1.3 billion, because of a high transaction rate. Spending on PA, however, remains low while the per transaction cost under the HIPAA standard is much higher for providers, at an average of six dollars per transaction.
High health spending and its increase can have many causes, some of which may be affected by policy factors, and some cannot. Such determinants include population increment, people distribution, changes in disease incidences, fluctuations in degrees of utilization, or cost, and frivolous cost expenditure.
These costs fall into two main categories:
- Billing-and insurance charges: Includes claims processing, clinical documentation and coding, and prior authorization.
- Other operating expenses: These include all expenses that are not related to billing and insurance and include quality assurance expenses, excise taxes and profits, and credentialing among others.
Hospitals, physicians, clinics and other providers, private payers, and public programs fund both direct and indirect administrative costs of the healthcare system.
Streamline Your Prior Authorization by Best Practices
Here are some simple yet effective tricks through which you can eliminate the prior authorization pain points in your practice.
1) Automate revenue cycle management
A survey conducted by the HFMA reveals how the various revenue cycle processes can save providers millions in a year. Applying AI, ML, and RPA help to minimize errors in eligibility, approvals and claims hence does not deny many. The system enables the providers to handle more prior authorization requests, and process rejected requests faster without putting much workload to the staff. For patients it means better accessibility of care services, increased effectiveness of treatment, and overall greater satisfaction. Successful implementation of three key objectives for providers: Increased revenue and efficiency.
2) Standardize processes
Each provider processes 41 prior authorizations per week, and it takes about 48 hours to process each one. The 2023 CAQH[2] Index reveals that prior authorization is used more than 87 million times a year; manual procedures require $14.49 per request. The AMA encourages standardizing and automating such processes with integrated e-PAs into EHR processes. This is cost efficient, relieves staff of some workload and makes for smooth claim submitted irrespective of the payer.
3) Train and mentor staff
Staff should be provided with frequent updates on changes in the system and regarding reimbursement polices so that prior authorization is processed effectively. People are capable of learning so change in processes are not issues though they retard productivity of the teams in place.
Outsourcing: Old but All-time Best Solution
In respect of obtaining prior authorization, many of the healthcare providers find it quite challenging. The processes of PA consume considerable time and money; it reduces some positive aspects of health coverage for providers. Such services may entail a number of hours of work as well as cost implication, therefore creating a large space of administrative workload.
To help in this task, more physicians and other health care providers contract outsourced prior authorization services. These tasks can be efficiently executed by outsourcing them, hence avoiding the high operating costs hindering their one hundred percent delivery of high-quality patient care.
Resources:
- https://www.ama-assn.org/practice-management/prior-authorization/prior-authorization-delays-care-and-increases-health-care
- https://www.caqh.org/hubfs/43908627/drupal/2024-01/2023_CAQH_Index_Report.pdf
