Industry Voices—How the cloud could remedy the pain of prior authorization for payers, providers

Doctor on phone/fax
Prior authorization is a key pain point for payers and providers alike. (Getty/IPGGutenbergUKLtd)

The health insurance industry has made strides digitizing and automating many of its core processes, yet prior authorization remains a largely manual, cumbersome process.

Automating prior authorization would improve efficiency, lower costs, and reduce patient, provider and, yes, payer frustrations. Like electronic highway toll gates did to speed traffic by eliminating the need to stop and manually pay tolls, automating prior authorization would greatly enhance the experiences of all stakeholders.

Unfortunately, there has been only one federal standard covering a portion (the review and response portion) of the prior authorization process—and the standard’s adoption has been spotty. Part of the problem is the complexity of today’s healthcare landscape. In practice, each payer has its own initiation and escalation processes.


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Therefore, healthcare providers may have to deal with 40 to 50 individual health insurance plans, each with its own set of questions and requirements.

RELATED: 28% of physicians say prior authorizations led to serious adverse events, AMA survey finds 

These and other factors have conspired to keep prior authorization at the back of the pack when it comes to process automation. The 2018 CAQH Index found that 96% of the medical industry had implemented electronic transactions for claims submissions, with the adoption rates for five other core electronic processes ranging from 48% to 85%.

By comparison, even though the number of prior authorizations has increased by 14% over the prior year, only 12% of companies have adopted a federally mandated standard for automating part of the prior-authorization process.

In a separate report, CAQH identified six significant barriers that have limited the adoption of the existing prior authorization standard:

  1. The need for consistency in data content
  2. No federally mandated attachments/clinical document standard
  3. Lack of integration between clinical and administrative systems
  4. Limited availability of vendor products that readily support the standard transaction
  5. State requirements for manual intervention
  6. Lack of provider awareness

Modern technology offers the remedy for the pain of prior authorization, especially when it comes to the need for data consistency, as cited by CAQH.

RELATED: Council of Affordable Quality Healthcare CORE updates rules for prior authorization

Right now, there is no efficient way to know what information is needed to properly submit a request for a pre-authorization to the payer. As a result, there is a lot of guesswork and slow, back-and-forth communications between the patient/provider and payer. This slow process frustrates all.

Healthcare providers, for instance, are dealing with 40 or 50 different health plans, all with different pre-authorization submission data requirements. Without any standardization, this problem just keeps getting worse.

Advanced technologies with highly configurable workflows can automate this process and establish some standardization in process and data requirements to save time. Modern cloud solutions specifically designed for the healthcare industry help both providers and payers automate many of the elements of this multi-faceted process, despite its complexity and limited standardization.

Rather than a point solution approach, industry-specific applications built on a single cloud platform improve efficiencies by standardizing the prior-authorization process yet allowing configurations to meet the unique needs of each organization.

It makes it easy for payers to implement their own digital, rules-based workflows and integrate data from different sources without extra programming. For instance, each payer can implement its own prior authorization question lists and escalation workflows to accommodate various internal processes and eliminate the guesswork for staff while creating uniformity across the organization.

RELATED: Technology cuts PCP's prior authorization process from 5 minutes to 30 seconds

By helping payers automate the prior-authorization process, technology also improves the experience of healthcare providers and, by extension, their patients. Providers and their administrative staffs enjoy an easy-to-use portal for consistently entering data required by payers.

The use of electronic forms ensures the providers submit all necessary information, eliminates errors common with handwritten submissions, and speeds feedback. The system, for instance, can immediately kick-back a denial if certain requirements aren’t met and automatically initiate appeals or other remedial processes to cut time and duplicate effort.

A note of caution: Before adopting new technology, be certain that the system provides high levels of security and offers a wide range of identity, authorization, access, and encryption safeguards to provide best-in-breed protection and meet industry standards (e.g., HIPAA). There should be layers of security at every level including infrastructure security, network security and application security to counter threats both internal and external to protect the sensitive information embedded within every prior-authorization transaction.

Prior authorization is one of the toughest of health insurance processes to automate, and it will likely be some time before regulators and all other stakeholders are able to fully address the lack of standards and other barriers CAQH identifies.

Even in the face of these challenges, however, advanced technology can help automate this and other core processes—ultimately speeding resolutions, reducing manual labor demands and costs, and easing the frustrations of both healthcare providers and patients.

Kevin Riley is the senior vice president of health at Vlocity, an industry-specific cloud and mobile software platform.