If there’s one topic that’s sure to elicit groans from claims and billing teams, it’s prior authorizations. Despite promising improvements overall, Experian Health’s most recent State of Patient Access survey suggests that the efficient and timely management of prior authorizations remains a headache for providers, with 89% citing this as one of their top three improvement priorities in patient access. Obtaining pre-authorizations is time-consuming, often relying on antiquated manual systems that drag staff away from patient care. Ever-changing payer guidelines make an already frustrating process even more difficult. In this context, automating prior authorizations is an obvious choice for the 79% of providers who plan to invest in improving patient access in the near future.
Why are prior authorizations required?
Prior authorizations are when payers and providers determine in advance if the patient’s insurance plan will cover a particular drug, medical item or service. Providers submit information about the patient’s medical history and the rationale for the proposed treatment. The insurer evaluates this information and approves or denies the request. If a provider goes ahead without obtaining authorization, they are unlikely to be reimbursed for the cost of that care.
The intention is to ensure that tests and procedures are safe, effective and high-quality. It’s also a cost-control strategy, ensuring that expensive services are offered only to patients who really need them.
Why do prior authorizations get denied?
Insurers only approve prior authorization requests for treatment and services deemed medically necessary and aligned with their coverage policies. Authorization may be denied for several reasons: the treatment isn’t covered by the patient’s plan, the proposed treatment isn’t considered medically necessary, or alternative, less expensive treatments are available. Denials often result from simple paperwork errors, such as incomplete clinical documentation or missed deadlines.
Automating prior authorizations: an untapped opportunity
The prior authorization workflow involves some of the most time-consuming and expensive manual processes in the revenue cycle, making it an ideal use case for automation. Yet, according to the Council for Affordable Quality Healthcare (CAQH), only 31% of providers use electronic prior authorizations. This contrasts with much higher adoption rates for other transactions: 94% use automation for eligibility checks, 98% for claims submissions and 90% for coordination of benefits tasks.
With the amount spent on prior authorizations jumping by 30% between 2022 and 2023, switching to automated processes could save the industry hundreds of millions of dollars and many hours of staff time, among other benefits described below.
Here are 5 benefits of automating prior authorizations:
1. Prevent costly claim denials and rework
Without prior authorization, providers do not get paid. Failure to secure authorization was among the top three reasons for denied claims for almost half of the State of Claims 2022 survey respondents. Often, this is because the authorization does not cover all elements of a patient’s treatment, or the information included in the claim submission does not match the original documentation that was authorized.
With automation, it’s much easier to ensure that all codes, documentation and records are accurate and complete, reducing the risk of claim denials. Automation also gives payers and providers a shared view of account information, minimizing the need for prolonged discussions about the status of authorization and rework requests.
2. Access a central payer database that automatically syncs with changing payer rules
Revenue cycle management teams often struggle to keep track of changing payer requirements. Experian Health’s prior authorization knowledge base solves this by collating real-time updates to payer requirements. Staff can check what’s needed without needing to visit multiple payer websites and cross-check data by hand. Users also benefit from a guided, exception-based workflow, which notes whether submissions are pending, denied or authorized, and flags where manual intervention is required.
3. Improve operational efficiency
Almost four in ten providers find timely and efficient management of prior authorizations challenging. Automating prior authorizations reduces the manual burden on staff, so resources and time aren’t wasted on low-value activities. Providers can augment efficiencies by combining prior authorization software with other revenue cycle tools to create more coordinated and cost-effective processes.
On a webinar about how AI and automation reduce claim denials, Skylar Earley from Schneck Medical Center commented specifically on how AI Advantage was facilitating more efficient prior authorizations:
“[With AI AdvantageTM], we’ve seen the number of authorized outpatient visits increase by about 2.5%. For anyone that deals with prior authorizations and denials relating to prior authorizations, that’s incredibly promising. Billers feel like they’ve got another tool in their belt. For people who spend hours on the phone with insurance companies, fighting for dollars and claims we believe should be paid, any leg-up is a big deal.”
4. Prevent dangerous delays to care with faster prior authorizations
A 2022 survey by the American Medical Association showed that the authorization process leads to delayed and abandoned care and even severe adverse events, as patients and doctors wait to hear if paperwork is in order before proceeding with treatment.
Automating prior authorizations helps ensure patients don’t miss out on essential care because of administrative obstacles. Staff can shave an average of 11 minutes from each transaction, allowing them to initiate more authorizations in less time, and protect patients from the clinical consequences of rescheduling.
5. Deliver a better patient experience
Aside from these obvious and significant health effects, the prior authorization workflow also influences patient perceptions overall: in the State of Patient Access 2024, just over a quarter of patients said authorizations were the main reason they considered patient access to be better or worse than last year.
Automated prior authorizations free up staff to create a smoother clinical and financial experience for patients. Patients see their accounts processed quickly, with fewer errors and delays. When patients are certain that their insurer will cover their care, they can concentrate on their treatment rather than worrying about how and when it will be financed.
Find out how Experian Health’s automated prior authorizations help healthcare organizations get on the right path to reimbursement and make these benefits a reality in 2024.
