Prior authorizations were created to cut costs faced by payers and to reduce the number of unnecessary surgeries, tests, and medications. In theory, it seems like a logical concept that its benefits would trickle down to both patient and provider. In practice, however, based on years of provider feedback, many providers feel it has served to aid payers.
Prior authorization practices currently cost the healthcare industry between $23 and $31 billion each year per the Journal of the American Board of Family Medicine. In fact, when asked by a member of the American Medical Association private sector advocacy group, physicians reported that increasing the number of prior authorizations necessary to cut costs and unnecessary treatments is one of the least effective methods of doing so. The American Medical Association also states that on a scale of effectiveness, the only other measure that the same physicians rated lower was patient cost sharing. There is no denying it; manual authorization processes can be tedious and bothersome.
The number one complaint coming from providers: prior authorizations favor the corporate side of healthcare. It may appear that way, however if one digs a bit deeper it becomes increasingly obvious that there are benefits to requiring prior authorizations. While providers and their staff may feel as if prior authorizations slow the process down, prior authorizations are necessary. With an effective automation system in place, they become much easier to request, obtain, document and track.
Thanks to technology and streamlined automation, many prior authorizations that would have previously required time-consuming manual paperwork from medical personnel, can now be completed with a click of a button. Auto-adjudication efficiently expedites utilization management tasks associated with it by leveraging the organization’s standard guidelines using automation.
Most automation systems now allow you to perform multiple tasks in real-time. A provider can simultaneously:
- check a patient’s eligibility
- submit requests for prior authorizations
- send out automated approval letters
- facilitate payer-provider collaboration for referrals
- automate referrals of approval requests
- ….and more
This makes the delivery of care much more efficient for the provider and payer. It streamlines the process for everybody involved. With less confusion comes an increased level of accuracy – which in turn generates a faster turnaround time for authorization approvals.
Because the cost of healthcare is steadily rising and to mitigate that cost, everyone involved is continually implementing cost-saving measures. Quicker turnaround time results in cost savings for the patient, payer and provider. As healthcare continues to evolve around cost savings models, prior authorization has become one more vehicle to achieve this goal.
Auto-adjudication is just one technique being used to strengthen utilization management as we know it. It may even be a major player in freeing up a significant portion of the $23 – $31 billion being lost in the healthcare industry each year. Providers and health plans should be focusing on improving patient care while developing cost-saving techniques. By automating prior authorizations, this helps to buy back precious time. Find out how MedCompass can help your organization streamline your pre-authorization process.