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Perspectives

Addressing the Prior Authorization Healthcare Challenge

2017-12-20


A promising new prior authorization support tool comes at a tumultuous and needed time for both payers and providers.

As health plans increasingly rely on “prior authorizations” (i.e., PAs) to rein in costs and avoid low-value or overused treatments, medical tensions have intensified in recent years. The problem: patients are forced to wait before getting care, and PAs add another layer of paperwork to an already overburdened administrative process.

In fact, providers indicate that their staff members spend “several days” worth of waiting and an average of 20 hours or more per week obtaining PAs, according to a recent American Medical Association study. In a fully manual process, this typically includes filling out and submitting supporting documents by hand and on paper. Once a PA request is received by a payer, it can take an average of six to seven days to pass through the manual review process. Only then can a provider confidently schedule the procedure.

In a series of provider interviews conducted for us by Leavitt Partners, one of the most consistent frustrations voiced about the payer/provider relationship was the PA process, specifically the administrative burden it places on providers and additional wait times it creates for 90% of patients. Expectedly, this process negatively affects providers’ bottom line.

Consequently, the AMA recently called for industry-wide reform, demanding a system that streamlines requirements, reduces administrative burdens, and increases timely access and transparency. Without a federal effort to streamline the PA processes, many states are implementing their own legislation, but these efforts have so far been largely inconsistent. 

Prognosis Positive

Unraveling complex PA processes is an incredibly cumbersome process, with a mixture of manual and electronic components for each unique provider and payer relationship. Health systems are increasingly taking advantage of partially and fully electronic records and tools, but those are still in the minority. Simply put, there must be a better way.

To that end, we recently partnered with leading experts to develop a truly automated, electronic PA solution. Working with New England Healthcare Exchange Network (NEHEN) and Informatics In Context (IIC), we have created a promising pilot that has shown significant time and cost savings in addition to other ancillary benefits.

After spending 12 months interviewing both payers and providers on desired improvements, the team uncovered significant shortcomings in the PA and referral process and created a new rules engine to automate much of the process. For example, the system allowed a group of providers to identify upcoming patients that would likely need PAs. The providers could use a batch format to process authorizations and schedule appointments together. Once submitted in this manner, the PAs are pre-qualified before the patients even arrive.

In our trials, the pilot targeted three highly-used medical categories: home healthcare; select pharmacy drugs (Rituxan, Aloxi, Emend and Anzemet); and select surgical policies (knee arthroplasty, varicose vein procedures, breast surgeries, hysterectomies and cholecystectomies).

While operationalizing the PA decision-support tool, the developers considered provider needs, keeping the process straightforward, standards-based and automated. The developers also built in the ability for providers to identify errors before PA submission, prompting them to provide supplemental information within the transaction itself. This real-time, automated decision-support tool has increased the number of requests that are auto-approved based on providers’ delivery of requested data.

The early results are quite revealing.

  • As of May 5, 2017, 82% of the pilot’s PA transactions were touchless — meaning they did not require either payer intervention or provider follow-up.

  • Additionally, the pilot allowed providers to track submissions with real-time adjudication status rather than submitting a fax to request this information.

  • Based on our estimates, real-time tracking is projected to generate over 85% in cost and resource savings.

  • One pilot participant even reported that the platform had reduced its PA processing time from one week to 20 minutes, allowing highly-skilled clinical staff to focus on actual care rather than paperwork.

Three Key Insights

In our view, the benefits to providers and payers from this type of system are transferable to the entire healthcare industry. By implementing a true real-time, touchless, transparent PA system, providers can connect patients with the right care when they need it, while following proper procedure to reduce costs. As other payers and providers seek to leverage these benefits, they should consider the following insights:

Commit to a real-time, automated, and standards-based solution.

Solutions that stop short of a truly real-time, automated, standards-based process fail to fully leverage cost and time efficiencies.

Integrate both clinical and business logic.

Many PA solutions focus on either clinical or business requirements. The most effective solutions, however, integrate provider, payer, and health system knowledge to provide a singular, streamlined process.

Get buy-in from all relevant personnel.

Change — even if positive — is hard, especially with the number of people and parties involved in healthcare. To succeed, organizations must identify who does what and when, and then align those efforts among all stakeholders and patients.

Because payers and providers have unique workflows and each treatment may require individual configurations, it’s critical to work with partners that have both the technical knowledge as well as the willingness to act and react with flexibility. Each partner organization may have its own expertise, but they need to share a vision and agenda.

Looking Ahead

The potential to scale our pilot’s time and cost savings to the entire industry is exciting. Shrinking the prior authorization window from weeks to minutes means substantially faster care, happier patients, and ultimately better financial health. Integrating both administrative and clinical requirements in real-time also drastically increases transparency and alleviates tensions between payers and providers.

With a proven solution in place, payers and providers can then tackle other medical processes to further multiply time and cost savings. But it all starts with custom PA automation. Only then will healthcare streamline essential requirements, reduce administrative burdens, and make rules more transparent for delivering significantly better outcomes.

To learn more, please read “How a Real-Time Automated Decision-Support Tool Can Cure the Prior Authorization Time Drain,” visit our Healthcare Practice, or contact us with questions.

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Addressing the Prior Authorization Healthcare Challenge