Five Benefits of Automation in Boosting Authorization Efficiency
According to a survey by Kaufman Hall, 75% of healthcare leaders say the COVID-19 pandemic has had an adverse impact on their revenue cycle, including increased payer denials and an increase in bad debt.1 Some of the impacts, however, were challenges even before the pandemic. Denials are a prime example. The American Hospital Association reports that 89% of hospitals and health systems have seen an increase in denied claims.2
When approvals are delayed because of issues with authorization, patients have to wait to get the care they need, which can lead to poorer clinical outcomes.
While there are many reasons a claim can be denied, issues with authorizations are one of the most common.3 The entire process of managing prior authorizations is manual, prone to error, and time-consuming. Just staying on top of each payer’s unique requirements—requirements that are increasingly complex and often change without notice—is extremely challenging. It’s also a huge burden for physicians who are already being asked to do more with less.
The average physician completes 41 prior authorizations each week.4 Since the average prior authorization takes 19 minutes, that’s nearly 13 hours a week that the physician is spending on paperwork instead of engaging with patients.5 According to the 2021 CAQH, providers could save 16 minutes per authorization if automated.6 That’s a savings of almost 11 hours a week.
By automating prior authorization transactions, providers and health plans could save $437 million each year.7
But the problem with authorizations goes beyond delayed or denied reimbursement. When approvals are delayed because of issues with authorization, patients have to wait to get the care they need, which can lead to poorer clinical outcomes.
In a survey by the American Medical Association, 91% of physicians said prior authorizations have a “somewhat” or “significant” negative impact on outcomes.8 And those outcomes can be devastating; 34% said a delayed prior authorization has led to a serious adverse event for one of their patients; 24% said it has led to hospitalization, and 18% said it has led to a life-threatening event or the need for intervention to prevent permanent damage.9
Even when a patient’s life isn’t on the line, multiple rounds of canceled or rescheduled procedures can be frustrating for patients, can inhibit patient satisfaction, and harm the patient-provider relationship.
1. Improving Access
Industry experts overwhelmingly agree that one of the best ways to improve the prior authorization process is to leverage automation tools that eliminate manual tasks.10 These automation tools can identify patient accounts and dispatch automated calls via a “bot” to the payer to capture the necessary authorization information. A bot is simply a software tool that is programmed to perform the same steps that a human would take, only they can perform them much faster and without errors.
2. Reducing Denials and Write-Offs
In the case of prior authorizations, automated tools capture the payer’s authorization requirements and electronically enters it into a provider’s patient access system. An image of the authorization provides tangible documentation of the authorization. This streamlines the financial clearance process and helps improve compliance with service level agreements. Streamlining the prior authorization process also helps reduce denials, which cost providers billions each year.11 In turn, providers can see reduced bad debt and write-offs, or the need to chase revenue on the back end.
3.Optimizing Resources
Prior authorization automation tools remove the need to have dedicated staff spending hours on the phone or on a payer’s website, looking for the information they need. In a time when providers are experiencing revenue cycle staffing shortages, leveraging automation tools allows them to reassign existing staff to more patient-centric tasks.
4. Enhancing Patient Satisfaction
By facilitating faster, more accurate authorizations, patients are able to get the care they need when they need it. Fewer cancelations or multiple reschedulings can improve the patient-provider relationship and enhance patient satisfaction and loyalty.
5. Riding the Automation Wave
The journey to post-pandemic financial recovery is likely to be a long one. Providers cannot afford archaic, inefficient processes, especially when those processes have a direct impact on patient outcomes and the patient experience. While some states are in the process of passing legislation to reduce payer turnaround times for authorizations, there are things providers can do now to help streamline prior authorization processes in their organizations.12 Implementing automation tools to streamline the prior authorization process is a great place to begin.
References
- https://www.kaufmanhall.com/insights/research-report/2021-state-healthcare-performance-improvement-report-covid-creates
- https://revcycleintelligence.com/news/hospital-claim-denials-up-for-most-driven-by-prior-authorizations
- https://revcycleintelligence.com/news/hospital-claim-denials-up-for-most-driven-by-prior-authorizations
- https://www.ama-assn.org/system/files/prior-authorization-survey.pdf
- https://www.ama-assn.org/system/files/prior-authorization-survey.pdf
- https://www.caqh.org/sites/default/files/explorations/index/2021-caqh-index.pdf
- https://www.caqh.org/sites/default/files/explorations/index/2021-caqh-index.pdf
- https://www.ama-assn.org/system/files/prior-authorization-survey.pdf
- https://www.ama-assn.org/system/files/prior-authorization-survey.pdf
- https://www.hfma.org/topics/technology/article/revamping-prior-authorization-how-ai-and-automation-could-boost-care-and-revenue.html
- https://www.healthleadersmedia.com/finance/claims-appeals-cost-hospitals-86b-annually
- https://www.msms.org/About-MSMS/News-Media/prior-authorization-reform-has-been-signed-into-law