The Definitive Guide on the Challenges of Pre Authorization

Posted by Pat Morrell on May 15, 2019 11:15:48 AM

Health insurance companies started pre authorization policies with good intentions. By asking physicians and other care providers to give detailed accounts of the treatments needed along with evidence to justify the request, the insurers could actually gain insight on treatment trends and needs that would be helpful to providers, manage costs of care delivery, and increase patient safety by reducing the risks of over-prescription or superfluous procedures.

In reality, however, pre authorization has quickly became a source of contention between the insurers and their healthcare network providers. Hospital systems and medical practices feel handcuffed from providing the best treatment to their patients by having to engage in a long and tedious administrative process, while payers feel the added oversight is essential for maintaining their operations without ballooning costs.

On the practice side, the consequences of pre authorization proliferation (54% growth in just the past 4 years) have quickly rippled throughout the industry. Physician burnout rates and administrative costs have risen while patient satisfaction are dropping precipitously. And without active assistance from the insurance providers or EHR vendors, hospitals and medical practice’s have struggled to find a comprehensive solution (beyond just adding more back office staff and incurring more costs).

This definitive guide was written to investigate the complex challenges pre authorization creates, the past attempts to mitigate these challenges, and how investment in an artificial intelligence system can eliminate 60% of the total administrative work pre authorization adds.

The Challenges of pre authorization

According to American Medical Associates, “90% of surveyed physicians reported [pre authorization] sometimes, often or always delays access to care.” But why?

For starters, anytime organizations implement bureaucratic processes, there is an increase in paperwork and other administrative tasks that need to be completed. In fact, after health insurance companies broadened pre authorization mandates, physicians began dedicating an average of 20 hours a week to these tasks alone. This includes filling out the proper paperwork, double-checking data for errors, gathering all the necessary evidence for the request, and ensuring every form has been submitted correctly either digitally or by fax.

Manual prior authorizations

Pre authorization is also dynamic, meaning there is no uniform process for submitting a pre authorization request across health insurance providers. Instead, hospitals and medical practices must train their staff on each requirement of the individual insurance companies for each treatment, while also paying attention to daily changes to the procedures. Many teams rely on paper-based training manuals and even sticky note reminders to help them keep tabs on the changing rules and requirements—this is not a scalable answer.

Through understanding the number of hours medical practices dedicate purely to pre authorization, it’s no surprise these administrative tasks account for $31 billion of total annual healthcare spending in the United States.

Pre authorization does not only damage the bottom lines of hospitals and physicians, but also adversely affects the medical treatment patients receive. With 76% of physicians stating pre authorization affects how they made decisions about treatment, it is now commonplace for physicians to either prescribe treatment they believe will be approved by the insurance companies, or do not need pre authorization at all. The reasons for this behavior growing in popularity are numerous, with rising administration costs and physicians being time-poor being just two of the obvious ones.

Another powerful reason for foregoing the pre authorization process entirely is the wait between lodging the request and receiving a decision. At its most trivial, this delay slows down a patient’s recovery time and causes frustration and general unpleasantness. These delays can also cause sick or injured people to reject seeking medical treatment altogether if they do not believe taking the time to visit a medical professional is worth the hassle if they have a chance of being denied treatment.

At its most dire, however, these delays are a matter of life and death. In his article “Survey shows, 4.6 hours per week are spent channeling the approval process,” author Martin Sipkoff recounts how one cancer patient waited weeks for pre authorization of a cancer drug to clear, and died before the request was granted. Though this was an extreme case, two-thirds of physicians say it takes several days for a pre authorization to be granted, while 10% take at least a week. This means patients are sicker and injured for longer, and have a poor perception of the healthcare industry and how it can help them.

Past Improvements to Pre Authorization Challenges

Ever since pre authorization has made its way into becoming a ubiquitous administrative procedure in the healthcare industry, there have been strides taken to reduce its impact on patient access to care.

One such stride was taken by the insurance companies themselves, which was to eliminate the need for pre authorization for certain common treatments and medications. Instead, the insurance company gives clear instructions as to when pre authorization can be exempted and the steps for physicians to follow to ensure they’re not taking advantage of the system. Though it does allow patients faster access to care, these eliminations still require the medical practice to catalogue the treatment they’ve prescribed and justify their determination on the backend. And if the physician is found in violation of these frameworks established by the insurance company, they can be dropped from the insurance network entirely.

Pre authorization libraries have also been used to save time and resources. These libraries are hosted on a medical practice’s network and act as a database for all the treatments and procedures that need pre authorization, as well as the steps to submit the request. This reduces the time and tasks as the administrative staff does not have to call the insurance company for answers about which treatment require pre authorization, or what information is needed for approval.

The issue with maintaining a pre authorization library is staff still needs to fill out all the necessary paperwork, as well as continuously update the database with the correct information on what needs pre authorization and what does not. And since the insurance companies change these policies multiple times a day, there are still massive research and data entry components to maintaining a library.

Tasking and bot-based automation systems have also been employed to reduce inefficiencies in pre authorization. These systems can identify when a treatment is prescribed that will require a pre authorization, and then assign a task to an administrative staff member to gather all the information. More sophisticated systems will even pre-fill in some of the forms with the information registered inside its database, freeing up time staff dedicates to menial tasks. Of course, these systems can only do so much before handing over a bulk of the workload to their human counterparts. So, even though these systems have automated some of the work, staff will still have to spend a significant portion of the work week focused on pre authorization.

Artificial Intelligence - The Complete Solution to Pre Authorization

Understanding all the challenges medical practices face when following pre authorization policies, Digitize.AI set out to create a comprehensive solution using artificial intelligence (A.I.) systems. As the company saw it, A.I. could act as both an intermediary between the providers and the insurance companies, and as a record keeper of policy and procedure.

Artificial Intelligence for Pre Authorizations

The A.I. solution developed by our team here at Digitize.AI is Lia. Lia integrates behind-the-scenes with a practice’s electronic health record (EHR) and the insurance company systems. How it works is simple - after integration, Lia monitors all cases input into the practice’s EHR. When a case is added, Lia searches its continually-updating database for pre authorization treatments to determine if one is required. If there is a requirement, Lia gathers all the necessary patient and treatment data, and then submits the case information to a specific insurance company—all in real-time, eliminating the commonplace delays between clinical request and administrative follow up . While submitting the necessary data to the insurer, Lia concurrently updates the EHR that the pre authorization has been submitted. Afterwards, Lia monitors the insurer’s system for a response, then updates the practice’s EHR when a determination has been made.

The key differences between Lia and an administrative staff or physician fulfilling these same tasks are that Lia can collect and attribute the data at a much faster rate, can run multiple tasks at the same time, and can complete these tasks on any day and at any time—and Lia can accomplish these tasks without handing off tasks to humans. Lia also has the ability to continuously update its systems when it discovers new information, such as an alteration in a pre authorization filing process or when the pre authorization requirement for a treatment is removed. This virtually eliminates the gap between the information being released by the insurer and the proper processes being implemented into the medical practice - all without costly training sessions.

And it means Lia effectively gets smarter—and more valuable—over time.

With a comprehensive A.I. solution like Lia executing 70% of pre authorizations, end-to-end, , medical practices and hospital systems will benefit by having reduced labor costs for administrative work, faster turnaround times for treatment authorization, lower percentages of requests being denied, less clinician and staff burn-out, and, most importantly, higher quality care for patients.

Want to see how an A.I. system like Lia can integrate with your medical practice? Download our one-page informational PDF for more on how Lia works and its value for pre authorizations.

Pat Morrell

Written by Pat Morrell

Topics: AI, Prior authorization, Pre-authorization, Revenue cycle management, Pre-certification, Revenue cycle