From AI to Regulation, Making Progress with the Prior Authorization Process

The role of technology

Technology has the potential to streamline and improve the prior authorization process for all healthcare stakeholders, a coalition including the AMA, MGMA, America’s Health Insurance Plans (AHIP), and other leading trade organizations said in a consensus statement in 2018. Since then, the use of electronic prior authorizations has increased, going from just 12 percent of prior authorizations then to 28 percent in 2022, according to the latest CAQH Index.

Despite significant progress over the last couple of years, prior authorizations remain one of healthcare’s most manual administrative transactions. A third of prior authorizations are still done in a fully manual manner, whether by phone, mail, fax, or email, CAQH reports. But just as importantly, 39 percent are done in a semi-electronic way. By that, CAQH means through interactive voice response (IVR) or web portals.

Web portals

Web portals changed the way providers submit prior authorizations. Providers can go to the portal and enter the information payers need to make a call on a prior authorization request, so they do not have to call and have the information read out to them over the phone or by fax or mail. However, web portals have not been the change providers have been looking for when it comes to streamlining the prior authorization process.

“One of the hard things is that our authorization team has to remember 28 different passwords for 28 different portals, then they have to go through 28 different processes,” Anna Taylor, associate vice president of Population Health and Value-Based Care at MultiCare Connected Care, says about the pitfalls of web portals.

“Then, what’s the timeline of that payer for that procedure? Can you imagine the multipliers in all of that? That complexity doesn’t have to exist,” Taylor stressed.

But like prior authorizations in general, web portals aren’t likely to go away despite stalling full electronic adoption.

“We’re never not going to use a portal,” admitted Vona. “It’s great for the practices that it works for, and it definitely saves us time if somebody wants to build the case [for a prior authorization] in the portal. But it’s not really what will achieve cost savings and get time back for everyone.”

Instead, Blue Cross Blue Shield of Massachusetts is looking into how artificial intelligence (AI) can enhance the web portal to drive cost and time efficiencies for themselves and their provider partners.

“What we are trying to differentiate on is that we didn’t see true innovation because, in large part, it’s just shifting the work,” Vona explained. “We are looking for a solution that removes data entry on both sides.”

Automation and AI

The prior authorization process is one of the best use cases for AI in healthcare. Prior authorizations are a resource-intensive task that requires providers and payers to comb through clinical and administrative data to build a case for approval or denial. AI can step in to automate up to 75 percent (and at least half) of the manual work involved with prior authorizations, according to a 2022 McKinsey & Company analysis.

Blue Cross Blue Shield of Massachusetts recently embedded AI into its web portal technology to do just that. The AI automates cross-checking the payer’s prior authorization requirements in real-time to identify if a prior authorization is even required. If it is, the technology uses AI to cross-check the clinical history within the electronic medical record against the payer’s medical necessity criteria and automatically produces a recommendation. For more complex cases needing additional review, AI pulls the information and packages it for providers to send to the payer.

A proof-of-concept pilot that recently concluded at New England Baptist Hospital found that the AI-driven process reduced review time from an average of nine days to less than one day. The proof-of-concept pilot focused on hip and knee procedures for 32 orthopedic providers over four months. Blue Cross reported that 88 percent of prior authorization submissions were processed automatically in real time.

“Our main goal with this was to learn if we could do it. Was it possible? What we learned is that it is,” Vona stated.

The proof of concept was a success for the payer, but Vona acknowledged that replicating the process across all its provider partners is challenging. Blue Cross worked closely with the hospital to implement technology that connected to its EHR system to enable end-to-end automation.

“A lot of the big electronic medical record providers are not interested in using vendor products, quite honestly,” Vona said. “They tend to take their own approach and build something if providers need it. That is a real rate-limiting step for us.”

There are also competitors in the prior authorization automation market. Blue Cross partnered with Olive, an automation and intelligence company, but similar vendors like Waystar have already installed software in some provider EHRs.

Outside of Blue Cross’ experience with end-to-end automation, CAQH also identified several obstacles, including “the nature of the transaction itself, the lack of operating rules to support the use of the electronic transaction standard, a lack of infrastructure supporting electronic submission of supporting clinical documentation, vendor readiness, the ubiquity of web portals and a myriad of state laws.”

Beyond technology

Technology and its advancements are changing how payers and providers handle prior authorizations, but it is not changing the game for stakeholders.

It may be a case of “digitalization for the sake of digitalization,” says Iroku-Malize.

“If you have a bad process in place and you digitize that process, you still have a bad process,” Iroku-Malize stated.

AAFP believes that more comprehensive reform beyond the implementation of electronic prior authorizations is needed to address challenges with the overall prior authorization process. Technology is just one piece of a larger puzzle.

“The main thing is to have access to clear guidelines because we are trained to do evidence-based medicine, but a lot of these guidelines [for prior authorization reviews] are not rooted in evidence-based medicine,” Iroku-Malize explained.

Nearly all health plans say they use peer-reviewed, evidence-based studies when designing prior authorization programs. Physicians, however, beg to differ. Thirty percent of physicians, according to the AMA’s latest survey, do not think their health plans’ prior authorization programs are based on evidence-based medicine and guidelines from national medical specialty societies.

“Shining a light on what services are routinely being approved, what services are not routinely approved, which ones commonly need to be submitted again, all of this is incredibly important to know because it gets to the why,” Ernst said.

“The transparency piece of this shines a light on the reform that is really needed,” Ernst stressed.

To give healthcare stakeholders a peek under the curtain, both AAFP and MGMA are backing policy, regulation, and legislation like the Improving Seniors’ Timely Access to Care Act (HR 3173).

The House of Representatives unanimously passed the Improving Seniors’ Timely Access to Care Act in September 2022. The bill would require Medicare Advantage plans to report their use of prior authorizations, including approval and denial rates. It would also establish an electronic prior authorization process, require real-time decisions for routinely approved services, and encourage programs to adhere to evidence-based medical guidelines.

“[The Act] is important because it will nudge the payers into a process whereby they’re able to streamline it and standardize it, so that they are all following the same rules, the same protocols,” Iroku-Malize said. “And we will know exactly what they require from us so we can take better care of our patients.”

The Improving Seniors’ Timely Access to Care Act is a good start to get to the transparency needed for true prior authorization reform, Ernst added.

“Some of the largest Medicare Advantage plans are large players in the commercial space, too,” Ernst said. “To make changes in Medicare Advantage can, in theory, usher some changes in other areas outside of Medicare Advantage.”

There was a lot of momentum behind the Improving Seniors’ Timely Access to Care Act in 2022. However, the Congressional Budget Office pumped the brakes on HR 3173 after finding that it would raise costs by more than $16 billion over ten years because of utilization increases and the cost of technology adoption.

However, trade organizations still have their boots on the ground to advocate for more significant prior authorization reform on a national scale.

“It’s a two-pronged approach between the regulatory and legislative sides,” Ernst explained. “The meat of what will happen in terms of how an electronic prior authorization program is implemented, for instance, is going to be primarily through the regulatory process because it would be very prescriptive if it were legislative. For that reason, regulation will be important here.”

In fact, CMS proposed a regulation in December 2022 that would require an electronic prior authorization standard to be used by Medicare Advantage, state Medicaid and Children’s Health Insurance Program (CHIP) agencies, Medicaid managed care plans, CHIP managed care entities, and Qualified Health Plan issuers on the federally-facilitated exchanges.

The intersection of tech and regulation

CMS is proposing to require the use of a Health Level 7® (HL7®) Fast Healthcare Interoperability Resources® (FHIR®) standard Application Programming Interface (API) to support electronic prior authorization. Under the rule, payers would also have to provide more information about prior authorizations, such as specific reasons for denials.

Other provisions of the proposed rule include public reporting of certain prior authorization metrics and a requirement that payers send decisions within 72 hours for expedited requests and seven calendar days for standard requests, which CMS says is twice as fast as the current Medicare Advantage response time limit.

If finalized, the rule could bring results like those realized at MultiCare Connected Care, which was the first to implement an HL7 FHIR API with its payer partner Regence to streamline prior authorizations. The organizations jointly announced in October 2022 that the standard has achieved near real-time determinations while enabling prior authorizations within existing workflows.

“By utilizing this technology, it enables us not only to exchange data in a one-to-many fashion from a platform perspective, but it also enables us to reduce all of the little pieces in between, like passwords, clicks, and having to pull the data that you need out of the record,” Taylor said.

“This solution pulls it itself. We’re just doing what you would call a high-reliable cross-check, and the solution enables all of that to happen in a matter of two minutes.”

The real beauty of this type of prior authorization solution is “it is nobody’s secret sauce,” according to Kirk Anderson, Regence’s chief technology officer. FHIR leverages open technologies to create an interoperability standard for facilitating the exchange of health information between payers, providers, patients, and others involved in the healthcare ecosystem.

“We’ve been trying to solve some of healthcare’s key problems like prior authorization with proprietary solutions, meaning we could invest a lot to make something work, but it would only work for MultiCare,” Anderson explained. “We would end up with dozens of different ways to solve the same problem, depending on which technology vendors we as payers and providers had chosen to adopt.”

CMS plans to put the HL7 FHIR prior authorization standard to the test, which was no surprise to Anderson, who serves as the board chairman of the Da Vinci Project. The Da Vinci Project is an HL7 private sector initiative that aims to address value-based care and interoperability through the FHIR platform.

“It’s not a mistake that the work that MultiCare and mine have just put into production this summer is very much in alignment with what was described as being the way to do this in the future. That’s because the Da Vinci Project kept CMS very much involved,” Anderson stated.

“This is an example of CMS’ vision actually working in a production environment,” Anderson emphasized.

Iroku-Malize said in a statement that the proposed rule is a win for the organization’s advocacy but acknowledged that this regulation is another step toward reform.

“[W]e are pleased by HHS’s proposed rule to streamline prior authorization processes, but comprehensive reform is needed to reduce the volume of prior authorizations and ensure patients’ timely access to care. The rule is good news for family physicians and an important first step in alleviating burden and improving access to care.”

MGMA also feels encouraged by CMS’ proposal, which includes Medicare Advantage plans within its scope requirements.

“The onerous methods of completing these requests, coupled with the increasing volume is unsustainable. An electronic prior authorization program, if implemented appropriately, has the potential to alleviate administrative burden and allow practices to reinvest resources in patient care,” Anders Gilberg, senior vice president of government affairs, said in a statement following the rule’s release. “This is a positive step forward for both medical groups and the patients they treat. We look forward to working with CMS to refine and finalize this rule.”

Change is coming

Prior authorizations are on the brink of transformation. Healthcare providers are fed up with the way the process is handled, even when it is automated. Payers are also reexamining their programs to reduce the administrative burden on provider partners as well as on their own teams.

Technology—and more specifically, automation—has decreased the number of truly manual transactions when it comes to prior authorizations. More sophisticated analytic solutions are even taking it a step further. However, real change will require the help of law and policymakers, according to leading trade organizations.

The federal government has put a target on prior authorizations, drafting new requirements to make the process easier for all, but especially patients who, at the end of the day, are left waiting for treatments.

“Prior authorizations divert valuable resources away from direct patient care and could lead to negative patient outcomes,” Iroku-Malize said. “So if we are active in trying to make a change here, then we can now use these resources to provide better patient care.”