New technology and evolving payment models may offer relief for providers fed up with the current state of prior authorizations, according to a new report.
Both the American Academy of Family Physicians and the Medical Group Management Association have been highly vocal about the frustration providers feel with regard to requirements around obtaining prior authorizations from insurance companies. In a new report, Chilmark Research sees hope on the horizon in the form of increased industry focus on value-based care and new technology supporting provider-payer collaboration.
Current estimates of administrative costs related to prior authorization top $1 billion annually, according to the report. Its position at the beginning of the revenue cycle, where physicians’ decisions can have a significant effect on downstream costs, means the process is unlikely to go away anytime soon, either—in fact, the report envisions a reduction in the friction between payers and providers around prior authorization as a potential driver of provider-payer convergence.
“Providers and payers will be challenged to step outside past perceptions surrounding the [prior authorization] process, to look with enthusiasm upon new solutions in the market for innovation to improve results, building new levels of trust in the process,” said Jennifer Rogers, the report’s author. She sees the next five years as a period of transformation from the current, painful process to something more broadly efficiently managed.
Among the report’s predictions:
- Increased automation driven by new technologies and more streamlined technical workflows within healthcare organizations will drive “auto-approvals” and “touchless” prior authorizations within the next two years.
- The report sees “utilization management,” the high-level cost-control process by which payers manage the cost/benefit analysis for healthcare services, as a trigger for provider-payer convergence as providers both benefit from and aid in refining existing payer infrastructure.
- As value-based care measures push more responsibility on providers for controlling variations in their utilization metrics, the report sees increasing pressure for hybrid models that drive prior authorization from both payer and provider perspectives.