Nearly every healthcare provider feels the pain of managing prior authorizations. A staggering 90% of physicians say manual prior authorizations are a concern, according to the 2019 CAQH Index. Further magnifying the current situation are payers’ intentions to increase prior authorization requirements for even more services in the near future. Already considered healthcare’s most time-consuming and costly administrative transaction, prior authorizations threaten to overwhelm hospitals, especially those with resources stretched thin by the COVID-19 pandemic.
Time is money
Staff time spent on prior authorizations is a major issue. A 2019 American Medical Association survey showed physicians complete an average of 33 prior authorizations apiece per week, each taking about 26 minutes when done manually. This adds up to more than 14 hours, or almost two business days every week—time many providers don’t have after laying off or furloughing workers during the pandemic. While healthcare jobs are now rebounding, a September report showed sector employment down more than 630,000 jobs for the year, leaving many hospitals and ambulatory facilities still shorthanded.
As the number of services requiring prior authorizations rises, providers must make a choice. They can either add staff, oftentimes without more patients to justify an expanded workforce; or they can automate prior authorization management processes to boost existing staff productivity. Understandably, some hospitals are delaying technology purchases because of financial pressures brought on by COVID-19. Postponing investments in a solution may save money in the short term, but over time, providing unauthorized care can result in expensive denials and revenue loss that can never be recovered.
Practical considerations for prior authorization management
Automation is clearly the answer to providers’ prior authorization woes, but it is not a one-size-fits-all cure. Small to mid-sized hospitals, for example, don’t necessarily need all the functionality and extra bells and whistles that might be configured for complex health systems. Before making technology purchase decisions, hospitals should carefully define their priorities and the measurable improvements they expect, such as time savings, cost savings, reduced denials, and fewer patient care delays.
Hospitals must also be realistic about what automation can do on its own. Advanced prior authorization technology is impressive, with the best solutions able to continually update state, regional, and national payer rules and incorporate new knowledge based on outcomes. Technology alone, however, seldom solves hospitals’ prior authorization management problems. It must be coupled with new streamlined workflows, staff training, and user accountabilities to optimize value and benefits. At a high level, providers should consider only those prior authorization solutions that can automatically 1) determine if prior authorizations are required for specific services, 2) guide staff through individual payer submission processes for required authorizations and 3) monitor prior authorization requests and notify staff when more information is needed and when requests are approved or denied.
Automation has shown to deliver real results
Hospitals face mounting prior authorization requirements, continuing financial pressures, and staff constraints. Fortunately, there are technology solutions that address the maze of changing payer rules, inconsistent documentation requirements, and redundant manual processes. When tailored to hospitals’ specific needs, they can deliver tangible, immediate, bottom-line benefits. The 2019 CAQH Index shows automation can reduce prior authorization transaction time from 21 minutes to four minutes, on average. Leading technology solutions have been shown to cut denials in half and increase operational efficiencies by up to 65% in as little as 90 days.
Few revenue cycle processes need improvement as urgently as prior authorization management. Taking action now not only helps hospitals relieve current stresses caused by COVID-19, it can help them set new standards of operational efficiency and patient care for years to come.