Healthcare struggles to move prior authorization into the digital age

While the technology exists to improve the automatic exchange of information, manual processes are a burden to providers and affect patient care.

Prior authorization is costly and time-consuming for doctors and dangerous for their patients, according to recent studies and frustrating experience within the industry.

Although efforts are underway to try and to use digital exchange, this process is still mostly manual. Only 21 percent of 182 million prior authorization contracts were fully electronic in 2020, according to the Council for Affordable Quality Healthcare.

Prior authorization represents a growing, pernicious pain point within healthcare. A survey of 1,000 physicians conducted by the American Medical Association last year paints a grim picture of the strain this process places on the healthcare system. Physicians burn 16 hours per week on prior authorization, AMA concluded from survey results.

But of more concern is the process is having on patients’ lives. The AMA survey found that more than nine out of 10 physicians report that prior authorization delayed necessary care to patients. Some 90 percent said the process resulted in a negative impact on clinical outcomes, and nearly a quarter of physicians said it led to a serious adverse event for a patient in their care. Also of concern: 74 percent said prior authorization led to patients abandoning their recommended course of treatment.

“The prior authorization process became indefensible years ago,” said Seema Verma, administrator for the Centers for Medicare & Medicaid Services (CMS), during a speech at the AMA National Advocacy Conference earlier this year. “Patients are frustrated, and doctors are sick of pointlessly wrangling with insurance companies.”

“It’s really not a technology problem,” according to Craig Knier, senior director product management at Change Healthcare, who is also co-chair of the WEDI Prior Authorization Subworkgroup. “The data has evolved, and the technology has evolved, and the process has evolved,” he said, during a recent webinar sponsored by the Da Vinci Project. “But the workflow and the duplicative integration is seeming to be the challenge.”

Knier said the prior authorization process for one patient can involve as many as 70 pages of faxes. “And I’m going to make a payer utilization management clerk sift through all of that information so that I can maybe get authorized.” The other choice is to go into a portal or send information via an attachment, he said.

The lack of digital investment in prior authorization comes with a hefty price tag, because digital processes injected into the process have shown savings over manual processes. A recent CAQH study found the medical industry avoided spending $482 million in 2020 annually by moving some prior authorizations away from manual processing. An additional $417 million could be saved annually if plans and providers convert the remaining manual and partially electronic transactions to fully electronic transactions, CAQH estimated.

Even as frustrations are mounting, prior authorization requirements are increasing. According to a Medical Group Management Association survey of 716 physician groups last year, 81 percent said prior auth requirements have increased.

The situation is so frustrating that lawmakers are taking notice. Last year, there were 65 pieces of proposed legislation around prior authorization across the country, Knier said.

Health plans seek a solution

Executives of America’s Health Insurance Plans say prior authorization is one of the many tools health plans use “to promote safe, timely, evidence-based, affordable and efficient care.” Yet, AHIP agrees, the process is burdensome, especially when working on an “outdated paper-based system.”

Last year, AHIP launched the Fast Prior Authorization Technology Highway (Fast PATH) initiative, to see if electronic prior authorization (ePA) could improve the process. Six health plans, collectively covering more than 50 million lives, participated in the project--with Availity and Surescripts serving as the technology partners and Point of Care Partners serving as an expert advisor.

RTI International conducted an independent analysis of the project, looking at prior authorization transaction data both before and after implementation of electronic prior authorization.

RTI found that 71 percent of providers who used the technology for most or all of their patients reported that patients received care faster with the use of ePA. The median time between submitting a prior authorization request and receiving a decision from the health plan was more than three times faster, falling from 18.7 hours to 5.7 hours--a reduction of 69 percent. In addition, the majority of providers reported less burden related to phone calls and faxes after implementation of ePA.

“The more frequently a provider used the technology solution, the bigger the benefit the provider experienced in reduced burden and ease of understanding prior authorization information,” RTI found. FAST is among a variety of initiatives underway with the intent of automating the prior authorization process. But many workflows and data exchange capabilities must be modernized to automate this increasingly ingrained payment authorization methodology.

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