Avoiding the Obstacle That Is Prior Authorization

“Prior authorization required.”

It’s a phrase that’s all too familiar among health care providers. Recently, the Kaiser Family Foundation looked at various services subject to prior authorization within Medicare Advantage (MA) plans. At 99%, durable medical equipment topped the list, with home health services and physical therapy coming in slightly lower at 92% and 89% respectively.

Since these MA plans must follow federal guidelines—and many private insurers also follow suit—submitting prior authorization requests is part of the daily routine of most homecare providers. What’s more, as the services that require prior authorization continue to expand, so do payment denial rates. According to an American Hospital Association survey, 89% of providers saw an increase in claim denials between 2018 and 2020, with 51% saying the increase was “significant.”

Knowing if prior authorization is required and submitting clean claims are critical to the well-being of both the patients you care for and your revenue cycle.

A Clunky Process Yields a Sluggish Revenue Cycle

Today’s prior authorization process is ripe for change. It still relies heavily on repetitive data entry. Often, your team depends on tribal knowledge—there’s that staff person who knows the “Blues” better than anyone or a “Bible” of payer information that must be constantly maintained. Usually, prior authorization involves legwork to determine if it is required and to identify submission criteria, all of which needs to be gathered and submitted on the correct form via the payer’s preferred submission channel. It’s an inefficient process, despite your best efforts.

To make matters worse, post-acute providers are in a particularly precarious position because you rely on referrals. This adds a layer of complexity to the process. You depend on the accuracy and completeness of the information from the referring provider. If information is missing, you backtrack to fill in the blanks before you can get started—or risk a denial. It’s a burden at any time, but it’s particularly challenging now due to staffing shortages.

Denials, of course, aren’t always attributed to problems with the prior authorization submission. Earlier this year, for example, the U.S. Department of Health and Human Services’ Office of Inspector General reported that 13% of prior authorization requests to Medicare Advantage plans were improperly denied. The fact remains that many requests are denied due to missing information or typographical errors. Reworking the claim may overturn the denial, but that increases the pressure on overworked staff, delays patient care and strains your cash flow.

How Intelligent Automation Helps

If you’re skeptical about taking on intelligent automation, you aren’t alone. Change—even if it will definitely lead to improvements—can be daunting. You might worry that switching to automated prior authorization means you’re relinquishing visibility and control over a critical part of your revenue cycle.

The reality, however, is that you’re establishing greater control. When you implement intelligent automation, it follows a repeatable process that meets payer-specific requirements, removing opportunities for errors. Intelligent automation also decreases the time it takes to determine prior authorization requirements, gather and submit a request to five minutes, a time savings of nearly 90% over manual process involving repetitive data entry, and waiting on hold to confirm details with payers and other inefficiencies.

Automated prior authorization breaks down into four components.

1. Requirements: Based on factors such as payer, plan, service type, CPT/HCPCS codes, place of service, diagnosis and clinical documentation, intelligent automation enables real-time connections to determine if prior authorization is required, and if it is, identifies the correct submission form and criteria.
2. Pre-screening: As a best practice, the intelligent automation solution you adopt should check submissions for errors, information gaps and medical necessity. By doing so, you can experience up to 90% reduction in claims rework due to preventable denials.
3. Submission: Automation enables submissions directly via e-fax, payer portal or an EDI 278 transaction. You may still have to handle a handful of submissions manually when peer-to-peer reviews are needed, but even then, most of the heavy lifting will have been handled through the automated process.
4. Monitoring: With time-stamped submissions available all in one place, keeping track of the request’s status is simplified. The process is automated so you can quickly see approvals or denials as they happen. No more juggling multiple passwords for dozens of payer portals or time-consuming faxes and phone calls just to see if requests have been approved or rejected.

Part of automating this data-intensive, manual process involves enabling fast, secure exchanges of patient, provider and payer data, and delivering the necessary data where and when it’s needed, regardless of your system of record. Built-in controls in the automation can even help identify discrepancies in the data and flag them for correction prior to submission.

Look at Upstream Processes for Proactive Denial Management

It’s also important to troubleshoot and address denials internally. Are there areas where data gaps or errors occur further upstream of prior authorizations?

You might, for example, discover that errors or omissions in demographic information can be prevented by changing or standardizing your data intake or registration process. You can look at your internal documentation practices and collaborate with other providers such as referring physicians to ensure that everyone involved is capturing complete information needed to submit a clean claim.

The combination of intelligent automation and robust data pipelines give you the fuel needed to submit claims that are right the first time. You can dramatically reduce preventable errors, which account for 90% of all denials. That will do wonders for your revenue integrity and help you stay focused on what matters most: delivering the care your patients need.