Prior authorizations allow health insurers to determine if a patient’s planned care is medically necessary and how much of the cost they’ll cover. But what began as a well-intentioned process to promote high-quality, cost-effective care has become one of the most time-consuming and expensive manual transactions for providers. Transitioning from manual systems to automated prior authorization software is one way to expedite the decision-making process so patients get the care they need – and providers get paid – without undue delay.
Prior authorization software eliminates friction in the pre-approval process
Disjointed manual prior authorizations processes place a major administrative burden on staff, who must spend hours filling out forms, gathering information about the patient’s medical history, and communicating with insurance companies to submit and track requests. Walking this bureaucratic tightrope delays tests and treatments for patients and often fails to fulfill the promise of cost containment. To streamline the process, providers are increasingly turning to automated prior authorization solutions.
Prior authorization software helps providers check whether pre-approval is needed, compile and submit the request, and track payer decisions. It can check requirements in real time and quickly connect staff to the correct payer portal so they can progress without delay or guesswork. Data can be pre-formatted according to the payer’s rules, to avoid the roadblocks that pop up without interoperability. Software can monitor performance over time, to drive ongoing improvements and prevent denials and appeals. This helps providers increase operational efficiency, reduce the administrative load, and obtain the payer’s decision as soon as possible.
Soon, fully electronic prior authorizations may also be a requirement: in December 2022, the Centers for Medicaid and Medicare Services proposed a new rule to improve and expedite the electronic health information exchange. The Advancing Interoperability and Improving Prior Authorization Processes Proposed Rule would require affected payers to process urgent requests within 72 hours and standard requests within 7 days, beginning January 1, 2026. With more than 35 million prior authorizations submitted to Medicare Advantage plans in a single year (and more than 2 million of those being denied), providers will find these timeframes extremely challenging without electronic systems in place.
Manual prior authorizations: creaking under pressure?
Prior authorization software may be gathering momentum, but manual processes still dominate: 33% of prior authorizations were fully manual in 2022, barely moving from 34% in 2020. Many providers continue to grapple with the fall-out of inefficient systems, such as:
- The administrative burden – The American Medical Association estimates that physicians spend an average of nearly two days per week handling prior authorizations while 35% have staff who work exclusively on prior authorizations. As the volume of prior authorizations increases, these time-consuming processes cannot keep up.
- The communications challenge – Manual communication channels create too many opportunities for information to be misunderstood or misplaced when being passed between providers and payers. Providers’ staff find themselves juggling faxes, telephone calls and payer portal log-ins. Without data interoperability, payers and providers end up in data silos where they’re not working from the same account information. Delays mean real-time monitoring and decision-making are impossible.
- The denials problem – With manual processes, providers lack real-time visibility into changing payer rules. This lack of clarity means requirements may be missed or misinterpreted, leading to longer waits for approval and requests being denied. Not only does this have major consequences for patient care, but it also runs the risk of increasing out-of-pocket costs.
It’s unsurprising that the MGMA members repeatedly say that prior authorizations are the most burdensome regulatory issue they face.
The business case for prior authorization software
Transitioning from manual to electronic prior authorization processes can help overcome many of these challenges. Providers should focus on three main benefits when making the case for implementing prior authorization software:
1. Faster workflows
Revenue cycle management teams are tired of being asked to “do more with less,” but automated prior authorizations actually check this box. This software can increase efficiency by initiating more requests in less time, so staff can spend less time chasing down documentation and reworking denials. It takes charge of monitoring and managing requests, reducing the need for manual follow-up.
2. Easier authorizations management
Keeping pace with payer policy changes was a top concern for providers, according to Experian Health’s State of Claims Survey 2022. To address this, Experian Health’s online authorizations tool gives users access to a central payer database that instantly and automatically syncs with payer updates. Staff no longer need to log into multiple payer portals and cross-reference rules and requests by hand. It integrates customizable client-specific and plan-specific rules for more streamlined and accurate submissions. A guided, exceptions-based workflow gives staff immediate information on whether submissions are pending, denied or authorized.
3. Enhanced features (that go above and beyond manual processes)
Prior authorization software not only makes the whole process more efficient and user-friendly, but it also offers additional features that simply aren’t possible using manual processes alone. For example, with Experian Health’s Prior Authorizations software, an additional post-back service can be integrated with hospital information and patient management systems to share authorization status, number and validity dates and flag any inconsistencies. It can store digital images of payers’ responses for future reference. The software supports reconciliation by comparing authorized requests with pre-submission requests, to identify potential discrepancies and prevent denials. Finally, it also provides integrated faxing capabilities, so submissions can be sent to electronic and non-electronic payers using the same system.
An increased need for prior authorizations software as the number of authorizations increase
As patient volumes and payer policy changes continue to increase, providers will need to find ways to speed up prior authorization processes. Experian Health’s State of Claims Survey 2022 found that more than half of providers find it hard to track changes to prior authorization requirements – unsurprising given that Experian identified more than 100,000 payer policy changes between March 2020 and March 2022.
Neeraj Joshi, Director of Product Management at Experian Health, says that transitioning to automated prior authorizations will be essential to process requests efficiently at scale:
“With prior authorization software, we can help our clients cut decision times to the absolute minimum. Automation reduces processing time and enables real-time tracking of authorizations, which translates to faster, more efficient communication between providers and payers. As authorizations increase, providers should speak to software vendors to explore the opportunities to speed up approvals and expedite the delivery of medical care to patients.”
A nationwide survey confirmed that the use of electronic prior authorizations resulted in a shorter decision time. It also found that this advantage could be amplified with better integration into existing workflows. Experian Health clients who already use the eCare NEXT® platform to automate patient management and revenue cycle workflows will find that Prior Authorizations can be integrated seamlessly. This single-vendor solution allows providers to improve efficiency even further for faster processing times – and faster payments.
Contact Experian Health today to streamline, simplify and speed up the pre-approval process with prior authorization software.
