The prior authorization process is a prime example of the law of unintended consequences.
Established to manage healthcare utilization, prior authorization is meant to keep healthcare spending in check by reducing overuse of services and medications while improving the quality of care. Instead, it has become a tremendous burden on healthcare providers and a barrier to care for patients.
In this e-Book, we take a closer look at why SaaS vendors offering EHRs or healthcare revenue cycle solutions are feeling the pressure to address prior authorization. We’ll explore:
- Why the current prior authorization process needs an overhaul
- How automated prior authorization solves the big problems
- What factors to consider in the build versus buy decision
Your Customers Want Prior Authorization Automation
Prior authorization really complicates the process for both patients and physicians. When we’re sitting down together as a team—a doctor and a patient working on what’s going to be the best next steps to diagnose or treat that patient’s condition—there’s this whole other part of what has to take place.
Current AMA president Dr. Jack Resneck Jr.
Reality Falls Short of Expectations
The American Medical Association’s 2021 prior authorization physician survey reveals that:
Report treatment delays
Report treatment abandonment
Report negative impact on clinical outcome
And that’s just the impact on patients.
Eighty-eight percent of physicians also say that the administrative burden of prior authorization is ‘high’ or ‘extremely high.’
Prior authorization didn’t start out as a burden. In the early years, prior authorization typically applied only to new medical procedures and expensive medications as payers tried to rein in costs.
Over the years, however, payers have expanded prior authorization to include a much wider range of services and medications. Prior authorization currently requires painstaking, manual effort involving repetitive data entry, faxes, and phone calls. It also requires a fair bit of detective work to determine prior authorization requirements including which authorization form to use and how the request must be submitted, and with what specific information.
Adding to the burden is the lack of standardization; each payer sets its own rules so providers must constantly adapt to different requirements.
Costs Continue to Climb
As the volume of prior authorizations rises, so do the costs of managing it. Requirements discovery alone typically takes 20-45 minutes per patient.
While 40% of providers have staff that works exclusively on prior authorizations, dedicated staff isn’t a solution. Even if a provider can afford to throw more people at it, the ongoing labor shortage makes it impossible. What about the other 60%? Non-clinical and clinical staff tag team the prior authorization process and productivity suffers across the board.
Prior authorization is complicated.
Regardless of whether a provider has dedicated staff or not, the current manual prior authorization process is time-consuming and prone to errors, which increases preventable denials and the accompanying need to rework them.
Adding Prior Authorization Automation to Your SaaS Solution Makes Sense
Intelligent automation transforms prior authorization into an efficient, cost-effective process that integrates seamlessly in patient intake and revenue cycle workflows.
Rather than repetitive data entry, the manual data entry requirements are minimal—typically patient information, along with payer, plan, and CPT or HCPCS codes. Then automation takes over to:
The cost- and time-saving potential of automated prior authorization is substantial on its own. When combined with benefits verification and eligibility transactions, the 2021 CAQH Index estimates nearly $13 Billion in cost savings.
Electronic Eligibility and Benefit Verification
Electronic Prior Authorization
Claim Submission
Attachments
Identify if prior authorization is required.
Select the appropriate submission form and populate the relevant data from the system of record
Pre-screen the request for errors, missing information, and medical necessity based on payer rules.
Allow PDF attachments of signed physician orders, medical history or other supporting documentation.
Submit prior authorization request directly to the payer via the preferred method.
Monitor prior authorization request status in one place, with approvals returned directly to the system of record.
Consider These Factors Before Deciding to Build
You have a capable IT team. You could build a solution. But the fact that you haven’t yet is telling. Building entails both costs and risks you may not want to incur. Just because you can, doesn’t mean you should. Building a custom component to integrate in your existing solution, especially for a process as complex as prior authorization, warrants serious consideration. Breaking down the factors that go into the build versus buy decision helps clarify which direction is right for you.
Intelligent automation addresses complex, labor-intensive processes across many industries. Banks automate critical compliance processes like risk monitoring. Retailers automate demand-supply planning. Why not prior authorization?
Prior authorization is complicated.
registered payers offering multiple plans
unique combinations of prior authorization rules
Multiple plans with their own guidelines within each payer
No standardization of prior authorization rules across payers
1
Complexity & Strategy
In order to automate this process, one critical component will be building a comprehensive rules engine and policy library. And that’s just the tip of the iceberg for development requirements.
The Build vs Buy Decision
Considerations for Adding Automated Prior Authorization to Your Customers’ Workflow
A DIGITAL E-BOOK BY MYNDSHFT
2
Cost & Time to Market
- Is the project outside your domain expertise?
- Will allocating resources to build lead to backlogs on other projects critical to your organization’s goals?
If you answered ‘yes’ to either question, implementing an existing, proven prior authorization solution directly into your software platform may be a better option.
Questions to Ask
- How is performance measured and what is the process for ongoing product optimization and maintenance?
- What support resources are available for implementation and customer success?
Buying limits your control but conserves your resources. Responsibility for product enhancements, bug fixes, data updates, and future maintenance requirements stays with your solution partner.
Questions to Ask
- What are the projected costs for on-going maintenance — design and feature revisions, data management, data security, and development resources?
- What are your expected time to market and time to value?
Depending on your answers, the fixed cost of buying may outweigh the unpredictability of building. Plus, building from the ground up slows your time to market when demand is high, which could lead to customer churn. Implementation of a ready-made solution can start providing value much sooner.
Questions to Ask
Cost overruns from in-house development are always a top consideration — for good reason. The Project Management Institute study of healthcare IT projects reveals that:
With something as complex as prior authorization, initial development costs are just the beginning. Ongoing maintenance and customer support requirements can strain your budget and your resources.
The answer to the “build or buy” question comes down to timing. If you’re solving a big pain point for customers—like portal fatigue—integrating a proven prior auth solution in your platform helps you go to market faster.
Chief Product & Technology Officer
Healthcare IT Services & Consulting Company
3
Control & Continuity
Building in-house may be tempting because you have control over the requirements. (But that can contribute to scope creep if you aren’t careful.)
We never want to compromise on innovation within our own platform. By making the decision to go with an existing third-party solution, we can get to market quickly, solve a major point for our customers, AND keep our IT resources focused internally. Yes, you relinquish development control, but a good partner listens and acts on feedback because the goal is a long-term relationship.
Chief Technology Officer
Healthcare IT Technology Company
4
Connectivity & Compliance
- Does the solution use HL7® FHIR® APIs and other best-in-class technologies to facilitate secure data exchange?
- Does it meet HIPAA standards and security requirements for protected health information (PHI)?
Choosing to buy a solution that already meets or exceeds industry standards, future-proofs your purchase. It also helps ensure that your customers will benefit from seamless data exchanges while minimizing compliance and security risks.
Questions to Ask
Interoperability poses a huge challenge in healthcare, which is why stakeholders in both private and public sectors are working on standards for facilitating health information exchange. In addition, several existing and proposed laws take aim at the lack of interoperability.
The dual challenges of data standardization and easy information access are compromising the ability of both payers and providers to create efficient care delivery solutions and effective care management models.
The Da Vinci Project
Gain a market advantage with a white-labeled, automated prior authorization solution
The status quo for prior authorization presents a huge problem—one that you could solve for your customers. Yet only 45% of EHR vendors reported having technology to evaluate whether PA is required without initiating a PA request.
Addressing this gap in your solution can give you a competitive edge—both in acquiring new customers and retaining your existing ones.
Here’s another incentive: Only 44% of providers are satisfied that their SaaS vendor will change in response to feedback. The implication? The rest have one foot out the door and a vendor that solves their biggest administrative challenge could be all the incentive needed for them to make a switch.
Learn more about the Da Vinci Project by visiting https://www.hl7.org/about/davinci/
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