Escaping the Archaic Prior Authorization Quagmire Requires Modern Solutions

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Patient health insurance claim form in doctor or nurse hands for medicare coverage and medical treatment from illness, accident injury and admitted in hospital ward

By Siva Namasivayam, CEO of Cohere Health

Prior authorization (PA) is a dangerous and expensive healthcare problem that impacts provider job satisfaction as well as delays treatment, which can frustrate patients and increase the likelihood of risks to their health. 

Contextually, early in 2020 as the COVID-19 pandemic was setting in, some payers relaxed PA requirements so patients could access the care and treatments they needed. However, at the end of 2020, payers had reverted to the pre-pandemic, bureaucratic red tape of PA processes that cause friction with providers and delays care to patients. 

In an American Medical Association (AMA) survey released in April 2021 based on data collected in December 2020, 70% of 1,000 practicing physicians said that the health plans they work with had either returned to pre-pandemic PA processes—or they never relaxed their processes during the pandemic. Ninety-four percent reported care delays while waiting for authorizations for healthcare. As for patient safety and effectiveness, 79% of those physicians said that because of PA burdens and delays, patients end up abandoning their treatment. 

Also at the end of 2020, recognizing the necessity to improve and streamline PA processes, the Centers for Medicare and Medicaid Services (CMS) proposed a rule to allow payers, providers and patients to access pending and active PAs. For certain government programs and payment arrangements, the rule also requires application programming interfaces (APIs) to enable data integration with electronic health records, as well as time limits for PA decisions and transparent reporting for denials.   

What about the actual costs of PAs? According to an annual report by the Council for Affordable Quality Healthcare (CAQH), $756 million was spent on PA in the U.S. in 2020, up from $631 million the previous year. At $13.40 per request, PA is the costliest manual transaction in healthcare. Yet, more than one-third (34%) of payers and providers still use manual (phone, mail, fax, email) PA exclusively, according to the report.  

The need for improved PAs is evident, but there are certain things to keep in mind when considering how to improve authorization processes. 

What should be avoided when considering new PA solutions

When deciding how to tackle the PA conundrum, at the top of the list of things to avoid are any “solutions” that do little more than automate a broken system. Speeding up a flawed process does nothing more than accelerate failure. Thus, payers and providers should beware of solutions that appear to be add-ons to older, flawed healthcare software platforms. These are exercises in reengineering; not efforts to fix the fundamental problem with PA that long has been ignored by legacy healthcare software vendors. 

Also avoid PA shelfware and platforms that lack customization. While all providers and payers share common challenges regarding PA, some may have unique requirements that the PA solution must meet.

PA solutions that are built around legacy systems and billing coding almost by definition will not be user-friendly or patient centered. These will not work in a world where clinician burnout is real and healthcare consumers demand from their health plans and providers the kind of frictionless experiences they enjoy in other aspects of their lives.

The solution is about patients and providing value

The PA process, first and foremost, must be designed to improve the patient journey. A patient-centric PA solution requires an integrated platform purpose-built to break down traditional data silos that cause PA delays, inhibit high-quality, team-based care, and frustrate healthcare consumers. Rather than shape itself to the contours of the existing healthcare maze, a truly patient-centric PA solution will deploy cutting-edge technologies to create more efficient pathways and processes for patients, providers and payers.

In addition to being patient-centric, a PA solution must be user-friendly, intuitive, and transparent. People involved in the PA process on the provider and health plan sides must be able to easily communicate downstream and upstream about PA requests. Additionally, a PA solution should include tools and analytics to generate performance metrics and inform care decisions. By leveraging the artificial intelligence and machine learning capabilities of a modern PA solution, providers can develop evidence-based care pathways to offer optimal care.

Perhaps one of the greatest cases to be made about improved PA processes is the ability for payers and providers to move deeper into value-based care. While most payers and providers think that PA fits a fee-for-service healthcare model, modernizing PA processes could actually fit more in a fee-for-value world. Consider a solution that helps alleviate the burden from PA for providers, and gets better, evidence-based care to patients faster and safer, resulting in improved outcomes and better managed costs. 

As we’ve seen, change continues to disrupt the healthcare sector and government organizations and professional associations are continuing to provide pressure and influence. Improving PAs can reduce the costs of care, thus saving money while improving care delivery and the patient journey. It is important, however, that payers and providers assess and integrate the ability of a PA solution into their healthcare delivery models to improve information flow and cut down time delays while keeping the patient at the center of care.

About the Author: Siva Namasivayam is the CEO of Cohere Health, an emerging high growth digital health company.  

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