Becker's Hospital Review: Automation is a Must for Prior Authorization

Alia PaavolaApril 10, 2020

healthcare provider reviewing prior authorization

Despite a push by healthcare organizations in recent years to automate the prior authorization process, it is still primarily manual, prolonging the significant financial and administrative burdens absorbed by providers, patients and health plans. 


This burden is likely to continue unless the prior authorization process is redesigned and automated with the right technology, explained Joel French, CEO of SCI Solutions, which was recently acquired by revenue cycle solutions provider R1 RCM.


Here, Mr. French discusses the value of automating the prior authorization process, optimal automation technology and why a workflow redesign is needed for automation to become the norm.


Editor's Note: Responses were edited for length and clarity.


Question: According to the 2019 Council for Affordable Quality Healthcare Index, only 13 percent of prior authorization transactions were conducted entirely electronically last year. What must happen before automated prior authorizations can be the norm rather than the exception?


Joel French: In order for electronic and automated prior authorizations to become more widely used, the industry needs to redesign the prior authorization workflow and business process. Once the workflow is redesigned, then providers can use automation to digitally enforce more appropriate processes. Essentially, much of the manual labor currently required to support health plan prior authorizations can be removed if workflow is redesigned and processes are automated. 


Right now, health systems all have different policies regarding patient access and prior authorization. Too often these policy decisions are made because the providers are limited by inadequate technologies and poorly designed business processes or workflows. Some health systems have a policy stating they won't schedule an appointment until the prior authorization is secured. Others have policies allowing scheduling of most appointments immediately to obtain the case, but have the right to reschedule it if the prior authorization is not secured 48 hours prior to the appointment. 


In our experience working with thousands of health systems and hundreds of thousands of referring providers, we strongly believe that in order to increase the percentage of automated prior authorizations, providers should move to an order-first workflow wherever possible with real time, highly automated clinical appropriateness checking. This order-first workflow would switch the clinical appropriateness check to the time of physician order instead of being triggered much later by an ADT feed at the time of patient preregistration. We've found that if you move the workflow from the back end – at the time of registration and scheduling – to the point of physician decision, the point of referral or the point of ordering, providers can ensure the order conforms to the clinical appropriateness guidelines of a particular health plan. This workflow change is critical to increasing automation and performance improvements.      


Q: Why should healthcare organizations prioritize an automated prior authorization process?


JF: There are three reasons why: Revenue, cost and provider-patient loyalty. 

First, the majority of health plan denials and underpayments are attributable to prior authorizations, eligibility rules and medical necessity requirements. The reasons for denials get to the heart of why it’s important to automate prior authorization requests at the point of the physician's order or referral. It provides a better opportunity to ensure the receiving provider gets appropriately paid and the patient gets seen promptly.


The second reason is the cost of a manual prior authorization process. Data shows that the administrative costs related to dealing with prior authorizations plus back and forth with insurers represents about one third of a physician's compensation. A large proportion of health systems’ labor costs are represented by patient access functions, like scheduling, registration and insurance verification as well as denial management. By redesigning the workflow so the clinical appropriateness rules of the applicable health plan are run at the time of order, we have found that the downstream labor and certain payment decision disputes with the insurer can be avoided. By moving all that work from the back end to the front end, we can obviate a lot of the expense and frustration.The third reason is provider-patient loyalty. Too often there is latency in the prior authorization process and the patient gets trapped in the middle. A delay in treatment or testing can result in diversion of patient cases to a competitive facility, patient dissatisfaction that may adversely impact their willingness to visit your facility in the future, or patients not receiving the care they need at all.    


Q: What is the optimal technology to use to automate prior authorization?


JF: The conventional approaches that have been applied to revenue cycle and technology innovation have been inadequate to solve the challenges of revenue generation, expense reduction and provider and patient loyalty. 


Technology must be able to electronically ingest orders and referrals and run unique payer rules immediately, in real time. The technology should be able to run by individual plan the in-network check, eligibility check, member benefit determination and the rules omissions at the time of order.


If the workflow and technology are appropriately implemented, then a substantial portion of prior authorization determinations can be reliably completed within a few hours of the physician order.  In the event of more complex cases – for instance, infusions, surgeries or high cost modalities – we need an automated process that uses the requisite payer-required data to determine the prior authorization decision, and this information needs to be electronically submitted to the plan. The automation should also regularly check whether the health plan has made a determination. In addition, the resulting decision – whether the prior authorization is granted, denied, pending – needs to be automatically appended to the order. Then, if it's authorized, the scheduling process can be completed immediately on a highly automated basis, often resulting in patients being seen, and not rescheduled due to a lack of authorization clearance, within just days.



Manual prior authorization places significant financial and administrative burdens on providers and health plans. However, redesigning the workflow and leveraging automation to move the prior authorization to the front end of the revenue cycle can save a lot of time, money and frustration for providers and health systems. Today, R1 is helping clients automate 68 percent of all orders and referrals, with 95 percent complete within eight hours of the physician order – eliminating much of the downstream labor and back-and-forth communication with health plans.


To learn more about R1 RCM's Patient Experience solutions, click here


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Author Bio: Alia Paavola is a journalist at Becker's Hospital Review.