How Technology Can Fix Prior Authorization Challenges For Payers

Prior authorizations (PAs) add value. However, with all of the negative talk in the healthcare industry about PAs, it’s worth remembering why health plans created the process in the first place. As the advocacy group AHIP explains: Under the supervision of medical professionals, prior authorization can reduce inappropriate care by catching unsafe or low-value care and targeting where care may not be consistent with the latest clinical evidence – both of which can contribute to potential harm to patients and unnecessary costs.¹

Because payers have such a wealth of aggregate medical data – far more than any single provider organization could access and analyze – they are in a better position to uncover and apply insights to help their members receive the best possible care. That includes, for example:

• Protecting members from ineffective treatments
• Preventing members from undergoing potentially harmful treatments
• Reducing overall healthcare costs

Data clearly show that insurers have succeeded in reducing costs. Researchers of a large meta-study, published in the Journal of Managed Care for Pharmacies, concluded that “PA programs appear to reduce drug-related costs.” ²

Unfortunately, despite best intentions, PAs have become an increasing impediment to timely and cost-effective healthcare delivery.

In its most recent physician survey, the American Medical Association compiled these sobering statistics:

• 84% of doctors say the number of medications and services requiring PAs have increased in the last five years, and that nearly 20% of drugs now require a PA.³
• Doctors and their staff report spending an average of 13 hours per week completing PAs.⁴
  34% of doctors report that PA has led to a serious adverse event for a patient. ⁴
• These stats paint a clear picture. As PAs have expanded to cover more of a typical provider’s patient care, completing the paperwork-intensive process is consuming more of that practice’s time, focus and financial resources. In fact, the AMA study also found that 40% of practices have employees working exclusively on PAs.

Why technology is one of the main problems

As health plans add an ever-increasing number of medications and services to their PA-required list, staff will become increasingly burdened with requests from providers.

The problem is exacerbated by the fact that most electronic health records systems still don’t communicate seamlessly with each other.

In this common scenario, health plans are receiving most of their PA requests as fax documents, which requires manual review, re-entering data into other digital systems and often follow-up phone calls to track missing or illegible pages.

Much of the PA problem could be fixed – or at least greatly streamlined and improved – through digital interoperability.

Yet, technology can be a big part of the solution

AHIP ran a test in 2020 to study how implementing digital solutions (rather than paper faxes and phone calls) would affect the PA process. Here’s what AHIP found:

• 71% of providers who implemented electronic tools reported that their patients received care faster.
• The median time between submitting their PA request and receiving a decision from the health plan was three times faster, falling from 18.7 hours to 5.7 hours.
• 58% of experienced users reported less time spend on faxes.¹

This study focused on providers but consider how it can improve workflows and efficiencies for payers.

To the extent that payers can easily exchange patient data with providers – and automate how that data gets pulled into their system and directed to the right people for review – payers will receive these identical benefits. Payers will be able to arrive at informed PA decisions more quickly, reduce time spent dealing with phone calls and faxes, lower their overall expenditures and generally improve their members’ care outcomes. 

An AI-based, machine learning solution will continually become more adept at learning PA markers— even if every provider submits its requests differently – so staff will become ever-faster at reviewing and analyzing PA requests. And payers will be helping to ensure that providers deliver care to their members more quickly, which fulfills the overall goal of improving patient outcomes.

_References      

_{1.     “Prior Authorization: Fast PATH.” AHIP, www.ahip.org/prior-authorization-helping-patients-receive-safe-effective-and-appropriate-care. Accessed 8 Sept. 2022.}

_{2.     MacKinnon, Neil, and Ritu Kumar. “Prior Authorization Programs: A Critical Review of the Literature.” Journal of Managed Care Pharmacy, vol. 7, no. 4, July 2001, pp. 297–303, 10.18553/jmcp.2001.7.4.297. Accessed 25 Nov. 2021.}

_{3.     Measuring progress in improving prior authorization. (2021). American Medical Association. Retrieved September 8, 2022, from https://www.ama-assn.org/system/files/prior-authorization-reform-progress-update.pdf}

_{4.     2021 AMA prior authorization (PA) physician survey. (2021). American Medical Association. Retrieved September 8, 2022, from https://www.ama-assn.org/system/files/prior-authorization-survey.pdf}