Healthrise > Insights > RCM Services > Watch out for These Prior Authorization Pitfalls

Watch out for These Prior Authorization Pitfalls

Doctor concerned about prior authorization process

Missing a prior authorization can mean costly claims denials. However, prior authorizations are more complicated than ever – learn the info you need to stay on top of the issues in 2023. 

Insurance prior authorizations are a topic of contention between the provider and payer sides of the healthcare ecosystem. Healthcare payers – both government and private – use the prior authorization process to ensure that treatment choices are appropriate, legitimate, and cost-effective. Conversely, these time-consuming prior authorizations and associated claims denials are often causing delays in care and frustrations for providers and patients. 

The Problem with Prior Authorizations

The AMA reported that 940 out of 1000 providers saw delays in care due to prior authorizations (PA), and 8 in 10 said that they have had patients abandon treatment while waiting. 86% of these physicians surveyed by the AMA also felt that the prior authorization burden has increased significantly over the past five years. Over one-third of these physicians also have staff who exclusively work on prior authorizations as their primary job function.  

Even more concerning – 24% of physicians surveyed reported that the prior authorization process and associated delays have led to an adverse event for a patient. These adverse events range from the need for more treatment, more medication, or even hospitalization. 

The Movement for Change

Due to these startling statistics and other industry problems with the fragmented and time-consuming prior authorization process, legislation has been pushed by the AMA, the Council for Affordable Quality Healthcare (CAQH), the American Hospital Association (AHA), and several other organizations to reform and improve prior authorization by:

  • Selectively applying requirements
  • Lessening the volume of requirements
  • Improving transparency
  • Protecting the continuity of patient care
  • Automating standardized processes

The bill, H.R. 3107 – Improving Seniors’ Timely Access to Care Act – was introduced in 2019 but has lain stagnant since that time. 

Meanwhile, on Dec 6th, 2022 – CMS proposed a ruling to improve the Medicare and Medicaid prior authorization process for patients and providers in 2023. This proposed rule includes provisions for an expedited turnaround, more documentation, and streamlined interfaces. It also calls for a clear appeal process for authorization decisions. Providers’ ability to efficiently and expeditiously meet prior authorization requirements affects every facet of their practice and revenue cycle:

  • Claims denials and delays reduce revenue and slow cash flow.
  • Frustrated patients are less satisfied with the care and may assign fault to the provider.
  • More complicated processes and more procedures requiring PA mean a heavier administrative burden and cost for providers. 

Meanwhile, until the systematic change takes place, providers will need to deal with prior authorizations in the most efficient ways possible to minimize delays to their patients – and their cash flow. Claims denials are on the rise for multiple reasons, many of which are tied to multi-step PA procedures. 

How Can Providers Manage these Requirements?

For optimum workflow, the AMA recommends these five tips for provider practices when dealing with prior authorization burden:

  1. Check PA requirements before providing services or sending prescriptions to the pharmacy. This will proactively manage delays and prevent the back-and-forth cycle of calls and faxes that easily frustrate everyone involved. 
  2. Establish a documentation protocol that “checks the boxes” to document required data for prior authorization. Typical practices are dealing with the same procedures and/or medications on a frequent basis, making it easy to incorporate these into the documentation. 
  3. Re-evaluate if the prior authorization submission method you use is the best. Prior authorizations can be submitted via phone, fax, secure email, health plan portals, and standard electronic transactions. You can assess the advantages and disadvantages of each method by using the AMA toolkit and then select the method that best fits your workflow. 
  4. Track delays and follow-ups using shared tracking software. Following up on prior authorizations is primarily a manual process – which results in requests “falling through the cracks” and getting missed at times. 
  5. When a prior authorization is inappropriately denied, always submit an organized, concise, and well-articulated appeal (with supporting clinical information). Many providers get frustrated at this point and drop the ball – which is what some payers are hoping for. By submitting electronic appeals, you can even further streamline this process. 

Looking for even more ways to optimize your revenue cycle?  We get it! Healthrise is ready to help with a full suite of products and services to help you prevent denials, streamline processes, and improve cash flow. Contact us for more information and a demo of our products.