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3 Strategies to Minimize the Burden of Prior Authorizations

Automation, proactive checks, and dedicated staff are three ways that providers can reduce the negative effects of prior authorizations.

Jacqueline LaPointe
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Published: 08 Oct 2018

Prior authorizations, or prior approvals, are strategies that payers use to control costs and ensure their members only receive medically necessary care. The cost-control process requires providers to acquire advance approval from payers before delivering specific services or items for a patient.

Payers are increasingly using prior authorizations to lower their costs and improve care quality for their members. But the process of obtaining prior approval for services creates a significant burden for providers.

Eighty-six percent of providers recently surveyed by the Medical Group Management Association (MGMA) said that prior authorization requirements increased in the past year. And another 82 percent of providers in a new MGMA study identified the pre-approval process as their top regulatory burden in 2018.

“Health plan demands for prior approval for physician-ordered medical tests, clinical procedures, medications, and medical devices ceaselessly question the judgement of physicians, resulting in less time to treat patients and needlessly driving up administrative costs for medical groups,” stated Halee Fischer-Wright, MD, MMM, FAAP, CMPE, MGMA President and CEO.

Not only are prior authorizations burdensome for providers to perform, but they also negatively impact patient outcomes, according to most doctors.

Ninety-two percent of primary care and specialty physicians in a March 2018 survey conducted by American Medical Association (AMA) felt prior authorizations did not help to improve patient outcomes.

About 92 percent of respondents also said prior authorizations delay patient access to care, and 78 percent reported that prior approvals can sometimes, often, or always result in patient non-adherence to a course of treatment.

Prior authorizations may be a major administrative pain point for providers. However, payers are looking at the cost-control method as a key strategy, resulting in greater prior authorization use.

Providers can overcome the burden of dealing with prior authorizations by automating the process, proactively checking requirements, and using staff to focus on prior approvals.

Automate prior authorizations

Prior authorization automation has significantly lagged compared to other claims management processes, the Council for Affordable Quality Healthcare, Inc. (CAQH) reports.

Adoption of fully electronic prior authorization transactions actually decreased by 11 percentage points between 2016 and 2017, the most recent CAQH Index shows. At the same time, the volume of prior authorization transactions increased, from 32 million to 37 million, a nine percent increase in just a year.

Switching to automated prior approvals can streamline the process and prevent errors. Fully electronic prior authorizations can also save providers time and money.

The 2017 CAQH Index reveals that manual prior authorizations cost providers $5.75 each and take between 14 and 20 minutes of staff time each. Implementing electronic transactions, however, can save providers a total of $245 million and between seven to nine minutes per transaction.

To automate prior authorizations, the AMA advises providers to implement electronic prior authorization (ePA) technology to streamline prior approvals for medications.

ePA automates the prior authorization process for medications through integration into the provider’s EHR system and electronic prescribing workflow. Therefore, ePA “does not involve re-entering data into proprietary health plan portals, downloading forms from payer websites, and certainly not using a fax machine,” the AMA states.

Providers should discuss ePA technology with their EHR vendors to learn if the company offers electronic prior authorization solutions. Some vendors already have ePA capabilities built into EHR systems, while others require EHR upgrades, the AMA explains.

Providers should also ask their payers if they accept standard ePA transactions. Providers may have to perform some manual prior authorizations for certain payers until ePAs are accepted.

Health IT vendors are also working on prior authorization solutions for medical services. A 2017 Chilmark report found that prior authorization technologies “are on the cusp of a breakout moment.” Application program interfaces (APIs), artificial intelligence, and natural language processing (NLP) will allow vendors to offer more prior authorization solutions for medical and pharmacy services.

Chilmark experts recommend that providers do not wait for a magical solution to automate prior authorizations. Implementing prior authorization solutions now will allow providers to see immediate financial and clinical benefits while the technology continues to evolve and stakeholders adopt national standards.

Check requirements before providing services, sending prescriptions

Physicians overwhelmingly agree that prior authorizations delay patient access to care.

Providers oftentimes have to wait until payers receive and approve prior approvals before starting a treatment course. Payers can also deny services or medications, forcing providers to spend time and resources submitting additional documentation or an appeal.

Providers may not be able to control payer decisions on prior authorizations or how fast insurers decide on a case. But they can implement a proactive strategy to avoid delays in care.

Check prior authorization requirements prior to furnishing services or sending prescriptions to a pharmacy, the AMA advises.

Making sure a prior approval is needed and what is needed for payer approval can prevent medical service claim denials and lost payments, as well as ensure pharmacracies can fill prescriptions in a timely manner to prevent medication non-adherence.

The AMA suggests that providers monitor payer newsletters, bulletins, and websites for prior authorization changes or updates. Providers should also check with payers at the time of ordering through a standard electronic eligibility request via the practice management system or by calling the health plan.

“Investing the time to determine PA [prior authorization] requirements before a service is provided is well worth it, as most health plans will not pay for services if PA was not appropriately requested in advance of treatment,” AMA explains.

“As with everything else in your practice, documentation here is also key: be sure to document PA information (save and file the newsletter, print out the Web page, note the details of any phone calls, etc.) so that any later claim denials based on unmet PA requirements can be appealed with supporting documentation,” the organization adds.

Have a dedicated staff integrated into practice workflow

Physicians and other care delivery providers are particularly frustrated with the administrative burdens of prior authorizations. Providers overwhelmingly agree that prior approvals for services and prescriptions are a regulatory burden, delay patient access to care, and create unnecessary work.

Shifting the responsibility of prior authorizations to a dedicated staff could help to reduce the burden on care delivery providers and increase productivity.

One non-profit physician network of nearly 1,800 providers in Massachusetts found that using certified pharmacy technicians (CPhTs) for prior authorizations saved physicians about 40 hours a year and reduced the amount of time to research and submit a prior approval to 28 minutes.

The New England Quality Care Alliance (NECQA) had CPhTs, under the direct supervision of a clinical pharmacist, submit medication prior authorizations on behalf of the network’s physicians after practice staff triaged a prior authorization.

Then, the CPhT submits the prior authorization and notifies patients, physicians, and practice staff of the outcome.

If prior authorizations are denied, physicians receive recommendations on how to proceed with prescribing medications for the patient.

On average, one CPhT supported 30 physicians and their staff.

Physicians and practice staff accepted the CPhTs as part of their practice workflow. Physician acceptance was at 75 percent and 100 percent of physicians and practice staff found the dedicated staff member as “useful” or “very useful.”

Adding another staff member or shifting a current employee’s responsibilities may seem like too great of a financial task for some providers. However, the NECQA reported a 5:1 return on investment because dedicated practice time for prior authorizations significantly dropped.

Prior authorizations are an administrative burden for providers and their staff. Technology for medical services prior approvals lags and payers are only bolstering their prior authorization programs to cut costs.

Providers should be reviewing requirements regularly, assigning prior authorizations to a staff member, and using technology to prevent major pain points as the industry refines its use of the cost-control strategy.

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