Healthcare Intelligence Network

Prior authorization has been used for decades as an important check to ensure prescribed medical treatment is safe and appropriate. In recent years, however, it has become regarded by many as a frustrating, time consuming barrier to care.

Much of the frustration has to do with the fact that the overwhelming majority of prior authorizations are conducted using manual processes that can take days, and, in some cases, weeks, delaying patient care. Prior authorizations are also a financial burden on providers and plans. So much so that the industry could save $417 million annually if these transactions were automated, according to the 2018 CAQH Index.

In spite of the widespread frustration, the number of prior authorizations increased by 14 percent in 2018 over the previous year.

Increasing automation seems like an obvious solution, especially when there has been a federally-mandated standard for automating part of the process for more than a decade. But that just is not happening fast enough.

A recent CAQH CORE, an organization formed by the industry to develop common business rules to support healthcare transactions, white paper, identified six factors that have slowed end-to-end automation of prior authorization:

1. Data is inconsistent

   Health plans use codes to communicate status, errors and next steps for prior authorizations—including the need for clinical documentation to prove medical necessity. But today, these requirements differ across (and within) health plans, and providers can’t easily identify what information is required. This lack of uniformity— and use of overly generic codes— limit adoption of the standard prior authorization transaction by providers.

2. No federally mandated standard for “attachments” or clinical documentation

   As part of standard prior authorization requests, providers are asked to include “attachments” or clinical documentation. However, there is no national standard or uniformity for the supporting clinical documentation. This creates a sense of uncertainty about investments in various solutions, and results in workarounds that providers are asked to support.

3. Lack of integration between clinical and administrative systems

   Electronic prior authorization requests typically require the use of practice management systems (PMS) and data from electronic health record (EHR) systems. But integration between PMS and EHR systems is limited. This forces most providers to retrieve clinical information from the EHR and manually enter it into the prior authorization request. This is not only an obvious source of human error, but also a frustrating drain on productivity and efficiency.

4. Limited vendor products that support electronic prior authorization

   Only 12 percent of vendor products support electronic prior authorization, according to the 2017 CAQH Index. For all other electronic transactions, vendor support is between 74 percent and 91 percent.

   Some vendors indicated that, while their systems do currently support prior authorization, this functionality is not part of the core product offering. That is, prior authorization functionality may be available in some vendor systems, but only in a premium configuration.

5. State requirements for manual intervention

   Some state legislatures have mandated that certain steps of the prior authorization process be handled manually. For example, in both Colorado and Rhode Island, health plans are required to give providers an opportunity to speak directly by phone or in person with a qualified medical professional before issuing an adverse determination. Some of these manual requirements are in place because a phone call or written letter may be a more trusted mode of receiving communication regarding determinations.

6. Lack of provider awareness

   Many providers are unaware that HIPAA requires health plans to offer the standard prior authorization request to conduct prior authorizations electronically. Greater demand from providers can incent broader use of the standard and encourage development of vendor products to support its exchange.

How Do We Get to Automation?

Currently, there is a groundswell of support from a diverse group of stakeholders to improve the prior authorization process. The Department of Health and Human Services, federal and state policymakers, providers and health plans, industry coalitions and standard-setting organizations are all motivated to resolve the administrative burden associated with prior authorization—creating an unprecedented opportunity to find alignment and implement solutions.

So, Where Do We Start?

To reduce the prior authorization burden, it is important for all stakeholders to participate in developing standards that support automation, and follow them. CAQH CORE’s participating organizations, which encompass 75 percent of insured lives, have developed two sets of operating rules that are already addressing several of the challenges identified above. By adopting the Phase IV and V CAQH CORE Operating Rules, and participating in CAQH CORE’s prior authorization pilots, healthcare stakeholders can help accelerate the move toward automation of prior authorization.

This renewed spirit of collaboration is the pathway to reducing the prior authorization administrative burden. It is imperative for all stakeholders to actively encourage and participate in this collaborative momentum toward a more automated prior authorization end-to-end workflow.

About the Author: April Todd leads CAQH CORE, an initiative of CAQH that was formed to drive the creation and adoption of healthcare operating rules that support standards, accelerate interoperability and align administrative and clinical activities among providers, payers, and consumers. CAQH CORE is industry-led—representing more than 75 percent of insured Americans, including health plans, healthcare providers, vendors, government entities, and standard setting organizations. Five phases of CAQH CORE Operating Rules and Certification Test Suites have been issued to date.