Prior authorizations are increasingly burdensome for providers, in part due to a troubling disparity between health systems’ and payers’ adoption of automation. According to CAQH, fewer than a third of providers are performing fully electronic prior authorizations1. Compare that to major payers, 88% of which are using electronic means for prior auth review and response2.
No doubt automating prior authorizations for providers is complex, and partial solutions abound in this confusing market. But by choosing a solution with the right combination of functionality, payer connectivity, and service line coverage, providers have a tremendous opportunity3 to level the playing field and take back their time. We respond to some of the most frequently asked prior auth automation questions below and in our next blog.
Why should we work with a vendor? Can’t we build prior authorization automations ourselves?
Looking at the price tag for a vendor-offered automation solution can leave health systems wondering, “Is this really worth it?” While it’s tempting to explore funding and building your own automations, or to hire a consulting firm to identify areas for improvement, there are a few factors that make prior authorization uniquely challenging to automate:
- Technical complexity — prior authorization automation requires specific knowledge about the ideal workflow for each payer, healthcare data interfaces, and creating and maintaining web automations.
- Financial investment — that complexity, particularly around maintenance, requires significant ongoing financial investment that makes DIY automation out of reach for many.
- AI enablement — vendors have the resources (financial, data, and human) to effectively build, train, maintain, and scale AI-enhanced prior authorization automations, adding greater value than DIY automation can provide.
Read more: Possibilities and Pitfalls in AI DIY
What about prior authorizations through our EHR?
Payer connectivity via the EHR is promising, but few payers have implemented prior authorizations, instead leading with other payer pain points like care gaps. Broader payer and specialty coverage for prior authorization may be at least 18–24 months out. While you’re waiting for payer adoption in your EHR, manual authorizations are by far your most time-intensive transaction. Administrative inefficiency is eating up resources — time that could be spent on a better patient experience and other higher-value, pre-service tasks. On top of that, error-prone manual authorizations could be increasing your denial risk downstream.
Read more: When it Makes Sense to go Beyond your EHR for Prior Authorization
Do free prior authorization solutions really work?
Yes and no. Free prior authorization solutions are offered at no cost to providers because they’re sponsored by payers. What service lines are in scope and what payers are available is dictated by the payers, so coverage expands by payer participation, not by providers’ needs. If your unique payer mix isn’t well represented, the benefits could be minimal, and your authorization process would remain mostly manual.
Depending on your payer mix (particularly the payers whose prior authorizations are your most time consuming), you may benefit most from a solution purpose-built for providers. The prior authorization solution cost will be directly tied to the value it provides in optimal payer and service line coverage — and thus increased time savings — for your organization.
Read more: The Hidden Cost of “Free” Prior Authorization
Stay tuned for part two, where we dig deeper into vendor selection and prior authorization success.
1 2023 CAQH Index® Report
2 AHIP 2022 Industry Survey on Prior Authorization & Gold Carding
3 Mckinsey & Company: AI ushers in next-gen prior authorization in healthcare
