The importance of technology in prior authorizations October 21, 2022
Securing a prior authorization from a third-party payer is often a prerequisite to ordering a diagnostic test or planning a medical procedure. Whether a specific patient needs a prior authorization depends on the regulations put forth by that payer, whether private insurance, Medicare, or Medicaid. As the number of prior authorizations increases, so does the importance of technology in securing that approval for care.
A prior authorization (PA) essentially pre-screens a patient to determine whether the medical procedures and/or medication recommended by the physician is deemed “necessary” and if it will be a covered expense. Medical professionals typically oversee the process, with the goal of reducing inappropriate care and targeting where care may be inconsistent with accepted and current clinical evidence.
In a recent survey conducted by the American Medical Association, it was found that:
- 84% of doctors say the number of medications and services requiring PAs has increased in the last five years
- Nearly 20% of prescriptions now require a PA
- Doctors and their staff report spending an average of 13 hours per week completing PAs
- 40% of practices have staff dedicated to working on PAs
- 34% of doctors report that the PA has led to a serious adverse event for a patient.
Challenges arise because of the amount of time and resources that independent providers and their clinical teams spend to complete PAs. This may be at least partly due to the fact that many physicians are still relying on paper request forms that are faxed. They have not transferred all of their data to a digital platform that communicates with the third-party payer technology. Faxed forms require manual review and the re-entering of data, which delays decisions.
Interoperability is a critical factor in reducing the amount of work involved in submitting PA requests and processing the authorizations. Patient safety and health is at stake in many cases and time is of the essence in the decision process. An interoperable electronic health record (EHR) system uses the latest in technology to make the process more seamless and efficient. Adapting to this technology can also reduce stresses and frustrations for the provider and clinical staff.
AHIP (formerly America’s Health Insurance Plans) conducted a test in 2020 to study the effect of implementing digital solutions on the prior authorization process. They found that:
- 71% of providers who implemented electronic tools reported that their patients received care faster.
- The median time between submitting their PA request and receiving a decision from the health plan was three times faster, falling from 18.7 hours to 5.7 hours.
- 58% of experienced users reported less time spent on faxes.
A report from the Council for Affordable Quality Healthcare (CAQH) revealed that:
- 26% of prior authorization requests were electronic in 2020
- 74% were still handled via telephone or fax
- 97% of health insurance claims were done electronically.
The study concluded that healthcare payers should be commended for moving all insurance claims to a digital format. However, the use of technology is critically important for prior authorizations as well.
Technology makes the process more efficient, maintains the confidentiality and integrity of the patient’s medical information, and keeps the patient safer as it reduces the delays in care that can happen when outdated or inefficient methods are used for prior authorizations.