Practice Management Alert

This technology could benefit the process immensely.

For many medical practices across the country, “prior authorization” is just a really long four-letter word. The administrative burden of the prior authorization can be huge, for physicians and other staff, and there are real-time and real-life effects of prior authorization on patient care and health outcomes.

“The biggest thing we know [is] they aren’t going anywhere anytime soon, but drastic changes do need to be made, and we’re finally seeing some movement on the horizon,” says Terry Fletcher, BS, CPC, CCC, CEMC, CCS, CCS-P, CMC, CMCSC, CMCS, ACS-CA, SCP-CA, owner of Terry Fletcher Consulting Inc. and consultant, auditor, educator, author, and podcaster at Code Cast, in Laguna Niguel,  California.

Background: Prior authorization can save money. CMS has required pre-claim reviews and prior authorization for some devices and services since 2012. A government accountability report for the U.S. Senate Committee on Finance compiled by GAO shows that the practice of prior authorization saved the Medicare program approximately $1.1-$1.9 billion from 2012-2017 through a reduction in unnecessary utilization and improper payments.

Resource: Read the entire report here, https://www.gao.gov/assets/700/691381.pdf.

The Practice Affects Everyone

Since the beginning of the program, CMS has made pre-claim reviews and prior authorization requests to include any and all relevant documentation to demonstrate that coverage requirements have been met.

Private payers picked up the practice, too, and the administrative burden is intense for both payers and providers. The discussions to streamline the practice affect Medicare and private payers.

“Not just with Medicare, because there have been a lot of discussions about it, but also with some of the commercial plans as well. The burden isn’t just on the physician’s practice; it’s an expense for the insurance company so they really have to take a look at it as well,” she says.

The administrative burdens of the prior authorization practice have been high since its inception. An American Medical Association (AMA) survey administered in December 2018 shows some astounding statistics, including:

• Physicians and staff spend approximately 14.9 hours a week on prior authorization;
• More than one-third of practices have an employee whose sole focus is on prior authorization; and
• Twenty-eight percent of physicians reported that the prior authorization process has caused a serious adverse event for a patient, including death, hospitalization, permanent disability, or other life-threatening event.

Resource: See some of the highlights here, https://www.ama-assn.org/system/files/2019-02/prior-auth-2018.pdf.

Prior Authorization is Here to Stay

Though the prior authorization process has a lot of inherent problems, often related to the onerous requirements and associated lag-time, with the obvious cost-saving benefits, it’s safe to assume that prior authorization won’t go away, though there’s an industrywide push to streamline it.

Not only does this process take time away from patients, but 78 percent of physicians surveyed by the AMA said that the delays and paperwork involved led patients to abandon the suggested course of treatment, Fletcher notes.

AMA and other prominent industry professional associations are petitioning for change, including streamlining and standardizing the preauthorization process, Fletcher says.

Alternative Methods Exist

There’s a lot of discussion at the national level, especially around other industries, like manufacturing, about artificial intelligence and automation and how their use is often a detriment to employment within industries. However, automation makes a lot of sense for some aspects of healthcare, especially with the overall transition to electronic health records (EHR).

Though it’s a bit of a tongue twister, there’s no need to keep processing prior authorizations the way we always have, except because we’ve always processed them this way.

“Ninety percent of communications between payers and providers is still done by phone and fax. That really adds up, considering that there around 77 million prior authorizations done manually every year. Automation of this process could cut the cost of performing these transactions almost in half,” Fletcher says. The estimated savings associated with doing so is almost $7 per transaction, which adds up, in the big picture.

“The future of prior authorization needs to be in real time, and it should be a discussion and not just a transaction. If we can automate that discussion, it can really save time,” Fletcher says.

With EHR and the ability to automate some tasks, the industry is in a place where streamlining prior authorization, via an entirely new workflow, could be easy to implement.

“This process would work directly with EHR. Currently, when a provider orders an intervention, there’s a back and forth process. The new approach that they’ve been working on would involve an automatic trigger in the EHR; when a physician places an order that would send a transaction to the health record and to CMS to find out whether prior authorization is even required,” Fletcher says.

This kind of workflow would take the guessing out of meeting the standard of medical necessity, Fletcher says, as well as helping physicians feel like their autonomy is preserved. They, not payers, are arguably the authority on a patient’s care, and prior authorization, as it’s currently designed, often feels like jumping through hoops, even if the safeguards embedded in the process can sometimes help keep patients safe.

Another change that could help reduce the burden on requesting clinicians would be manifested by payers hiring physicians who are specialists to review claims, not just general practitioners, Fletcher says.

Streamlining a process that causes a lot of headaches may not seem easy, but the benefits for everyone involved would be well worth the effort.