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By Hamp Hampton, Chief Revenue Officer at Cadalys
Consumer advocates are touting the No Surprises Act, which went into effect on January 1 and bans most unexpected medical charges from out-of-network providers. But the reaction to the added pressure this will put on payers and providers has been considerably less enthusiastic.
Under the law, both payers and providers are facing increased costs. Payers will be required to cover services provided by non-network providers at an in-network level, while providers are prohibited from charging the member for fees in excess of the network rates. And the administrative costs on both sides are expected to skyrocket.
Knowing that the financial hit is coming with the No Surprises Act, payers and providers should look for other opportunities to contain costs and reduce administrative burden. One of the key areas ready for that type of disruption is prior authorization.
According to reports from the Council for Affordable Quality Healthcare, completing a prior authorization remains the single highest cost for the healthcare industry. It’s also the most time-consuming transaction for providers, with an average of 20 minutes for a single manual prior authorization and some providers reporting spending as much as an hour.
For example, if we estimate that prior authorizations for specialty services visits make up 50% of requests on average—and if payers and providers could fully automate or even reduce the number of steps involved in the process—these savings could move the needle on the bottom line. While technology can certainly cut costs and save time, the true first step for payers and providers lies in consistency and integration.
Increasing Urgency Around Prior Authorization Transformation
One of the biggest benefits of applying automation to the prior authorization process is the ability to interpret varying unstructured, inconsistent documentation about what is required to evaluate and confirm medical necessity.
When the communication exchanges designed to communicate status, errors and next steps aren’t clear, payers and providers spend excessive time trying to resolve what each side is conveying.
By allowing technology to remove much of the ambiguity that lies in the various steps across the decision making process on both sides, payers and providers receive clear guidance on precisely what is required and what supporting documentation or attachments must be included, the back-and-forth interactions are reduced, and the prior authorization process becomes much more efficient.
Technology innovations also introduce the ability to define rules that streamline and automate the evaluation process for authorization requests based on clinical data, guidelines and medical policy criteria. For example, one national carrier uses a rules engine powered by their evidence-based content and organizational coverage policy content to automatically approve certain types of requests where a member has coverage and clinical indications are met. In other cases, the rules engine shows providers exactly what type of supporting documentation is needed for certain types of submission codes, which eliminates the lengthy back and forth steps resulting from unclear directions.
A Dual Advantage For Healthcare Companies & Consumers
Improving the fractured prior authorization process for the services that remain in the control of payers and providers removes much of the friction that negatively impacts the consumer experience. It’s essentially a win-win strategy: more efficient workflows mean lowered costs and time savings for healthcare companies, and patients aren’t stuck in the middle of complex exchanges between their health plans and providers while waiting to get the treatments they need.
Healthcare is undergoing a digital transformation in all areas, moving away from faxes, phone calls, and paper-based processes. Now that the No Surprises Act has reset the rules around how payers and providers manage cases with emergency services, it opens up the possibility to make other processes more efficient by programming automated approvals in favor of costly manual intervention and furthers the aim of the act by promising a better, more transparent experience for members and patients.
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