While some progress has been made in the past year, insurance prior authorizations are still largely a manual process. According to the 2020 Council for Affordable Quality Healthcare (CAQH) Index, even with an 8% increase in 2020, fully electronic transactions only account for 21% of all transactions. The industry still has a long way to go to reduce both the administrative burden and costs associated with prior authorizations. As highlighted in this infographic, it remains the single most costly transaction in healthcare, costing $13.40 and 20-60 minutes per manual transaction, often completed using phone, mail, fax and email. The potential annual savings industry wide is $417 million, $322 million of which would be realized by providers.
In addition to the direct cost of obtaining and managing prior authorizations, there are significant capacity utilization costs as well. To avoid downstream denials for the high-cost diagnostic and treatment services that require prior authorization, health systems routinely reschedule patients when the authorization has not been received 48 hours before the scheduled appointment. It’s rare for the organization to fill that slot on short notice, so expensive equipment and highly trained clinicians are left idle.
While these financial impacts are significant, the negative effect on patients cannot be underestimated. It is often stressful enough for patients when their physician orders specialized care, such as an MRI or CT scan. Add to that the frustrating and confusing process to obtain prior authorizations, which cause delays in patients’ access to necessary care, according to 94% of providers.
In his previous article on this topic, Joel French, R1 EVP of Patient Experience, highlighted how an electronic order-first approach supports standardized and optimized prior authorization processes and enables a higher degree of automation. In this blog, we’ll discuss taking intelligent automation to the next level and how it can make the prior authorization process faster and easier for patients and referring providers, while increasing reliability and reducing costs.
Many organizations are turning to digital front door solutions, such as the R1 Patient Experience platform, to address the authorization challenge. With a technology platform that embeds standardized and optimized revenue cycle and patient access workflows, the entire prior authorization process becomes more streamlined and efficient. In addition, these technology-enabled processes are well-suited for advanced automation.
Here’s how this automated process works. When a physician decides that their patient needs a specialized service to facilitate diagnosis or treatment, the process begins by sending an electronic order to a rendering provider. Immediately upon receipt of the order, automatic, rules-based insurance validation speeds the process by running online, real-time eligibility, network and health plan checks. Next, sophisticated algorithms run to determine the likelihood that the payer requires a prior authorization. If no authorization is required, scheduling proceeds immediately.
If an authorization is required, in most cases, the process is done manually or using health plan web portals. By leveraging deeper automation, “schedule-ready” status is attained faster, so the patient receives care without unnecessary delays. Partners like R1 help clients take advantage of intelligent automation to reduce costs and accelerate care delivery. R1’s technology and expertise make this possible by:
From the patient’s point of view, the interaction between their physician and the health system should be seamless. By removing this friction, the speed and efficiency of the prior authorization process increases, which reduces stress and boosts patient confidence in their care team. Additionally, by enabling an order-first process and highly automated prior authorizations, clinical and financial clearance tasks are completed up front, which streamlines downstream billing workflows, reduces denials and improves reimbursement.
Alyson Belz, FHFMA, is the Regional Vice President of Patient Experience Solutions at R1 RCM.