Cultural Shift is Needed to Revolutionize Prior Authorization

Updated on July 29, 2023
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Prior authorization processes are commonly accepted as the most significant factor in healthcare costs and inefficiencies, and with over one million physicians, 200,000 physician practices, 7,000 hospitals, and 900 health insurers in the US, and healthcare representing almost 18% of gross domestic product, they have a massive impact. It’s no secret that change is needed, but until a collective effort for true seamless IT integration is made across the entire healthcare ecosystem, the true promise and intent of prior authorization cannot be realized. 

The challenges in prior authorization stem from a “perfect storm” consisting of a lack of technological integration across provider and payer systems and widening gaps in communication including a lack of acknowledgments, confirmation, or closed-loop communication. Thus, the current process may go something like this: 

The provider knows that requesting prior authorization is required but faces hurdles translating requests for required documentation from payer medical policies à The provider transmits the prior authorization request by fax, phone, or paper with the hope that supporting documentation is sufficient à The payer receives the request and determines that supporting documentation is incomplete à The payer is missing a reliable point of contact at the requesting provider to solicit additional information, delaying the necessary next steps.

The bottom line is, while technology is an important part of the solution and continues to improve, it must be accompanied by workflow changes, including improved communication methods and standardized processes to direct the documentation requirements to support prior authorizations. 

Providers and payers have long realized the inadequacies of prior authorization processes and acknowledge their impact on patient care. Both have assigned more resources to address these shortcomings. Approximately 35% of provider practices assign people to work exclusively on prior authorizations (AMA Prior Auth Survey 2022). Nonetheless, disruptions in patient care have been associated with prior authorizations, for example, those required for medications used in mental and behavioral health services. Delays of about four days due to prior authorization inefficiencies have been noted for rheumatology patients prescribed infusible medications. Such delays and disruptions in patient care have also been attributed to care abandonment of care, which leads to poor outcomes and increased costs for all parties. 

One positive use case of prior authorization is its aim to ensure appropriate, alternative care pathways and treatment plans when first-line drugs or therapies have no effect and next lines of treatment must be explored, as in step therapy or oncology. Determining next lines of treatment can be challenging, and the collective effort to identify the best course of action takes time and may introduce delays or increase costs. Prior authorization aims to identify the best quality care through medical peer review while trying to contain costs and minimize delays. Other examples of the positive impact of prior authorization include:

  • Appropriate use of medications in antibiotic stewardship or opioid management
  • Patient safety associated with drug interactions 
  • Identifying appropriate medical devices correlated to patient conditions
  • Cost reductions using alternative transport modes (often drawing on social determinants of health data) in place of higher-cost emergency ambulance transport

However, to realize these benefits, it is imperative that prior authorizations be performed in a timely manner and the related requests contain accurate documentation and clinical information per the medical and administrative policy of payers. Achieving faster turnaround and more precise matching of patient health information in support of prior authorizations will not happen without the collective commitment of providers and payers and those supporting such improvement, including HIT vendors, intermediary services (e.g., pharmacy benefit managers and clearinghouses), regulators, and standards developers. 

Healthcare experts have come together with the common purpose to improve prior authorizations in the HL7 Da Vinci project, a standards development accelerator, to ensure that the information exchange between providers and payers is optimized, payer rules expression and provider documentation in response to those rules happens accurately and efficiently, and that provider requests and payer responses are exchanged and trackable. This will result in faster turnaround times without compromising quality that comes with expert review when warranted. 

Broad adoption of the Da Vinci implementation guides across healthcare is necessary to positively impact prior authorization processes. Regulators are utilizing available levers like the CMS Advancing Interoperability and Improving Prior Authorization proposed rule to make this happen, but large-scale improvements will not be realized until there is widespread adoption of best practices across the health system. 

The transformation put forth in the CMS Advancing Interoperability and Improving Prior Authorization rule calls for standard API integration of both electronic medical records (EMRs) and payer systems for prior authorizations. The rule sets a minimum compliance or “floor” of providers and payers using the HL7 Fast Healthcare Interoperability Resources (FHIR) specification as a common information exchange standard for: 

  • Information about items and services that require prior authorizations
  • Patient data from the EMR to support the medical and administrative justification for the item or service
  • Payer requirements
  • Request for the authorization itself from the provider
  • Response or determination made by the payer

By using the FHIR standard as specified in the Da Vinci implementation guides, EMRs and payer systems will be sufficiently integrated and able to communicate in real time. Additionally, by converting medical policy into computable rules, payer systems will be able to retrieve the clinical documentation from the EMR to support the authorization and return the determination back to the provider (via its EMR) in shorter time.

Integrating provider and payer systems can shift routine, repetitive tasks that currently introduce critical delays from human hands to automated processing. Investment in these systems allows the expertise required for medical reviews to be redirected from low-value tasks to higher-value medical evaluation. Once we can truly integrate payer and provider systems, we will make prior authorization a seamless process that reduces administrative burdens and ensures a better quality of care is realized, all while reducing costs. 

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Michael Gould

Michael Gould is Associate Vice President for Interoperability Strategy at ZeOmega, focused on bringing products to market to meet the needs for interoperability in healthcare. Michael has also been a key leader in industry collaborations to develop standards for healthcare data exchange to support interoperable workflows and streamline provider and payer interactions to improve overall experiences and outcomes. Michael’s portfolio also includes telemedicine and electronic health records implementation to support patient health and well-being across clinical and social dimensions that impact overall health.