There are many points of friction along the patient journey, but prior authorization processing is among the most time-consuming, costly and frustrating of these stumbling blocks. Each year in the U.S., medical administrative expenses total approximately $400 billion and more than 10% of this spending is solely for obtaining authorization to provide healthcare services. Often cited by providers as a major source of administrative burden, the prior authorization process is also difficult and stressful for patients and caregivers as well.
Changes to prior authorization processing are long overdue and regulators are well aware that modernizing it by introducing automation will yield massive time and cost savings. The nonprofit Council for Affordable Quality Healthcare estimates that electronic prior authorizations could save the U.S. medical industry more than $437 million each year and save provider organizations 16 minutes on every single transaction they process.
New regulations are emerging that will completely redefine prior authorization processing. In late 2020, the Centers for Medicare and Medicaid Services (CMS) proposed a new rule expressly intended to improve the electronic exchange of healthcare data among payers, providers and patients in order to streamline the prior authorization process. Once it comes into force, this rule will mandate that payers and providers integrate their technology systems to enable real-time, standards-based, bi-directional information exchange.
Not only will this new regulation modernize prior authorization processing, but it will provide a template for far-reaching, transformational change throughout the healthcare industry – change that will ultimately enable unified experiences across the entire continuum of care.
Enabling real-time communication between payers and providers
In the past, payers and providers have integrated their technology systems in limited ways so that information could only be exchanged with a significant time lag. Processes like verifying eligibility, checking claim status, or coordinating benefits weren’t performed in real time.
“There have never been universally-adopted standards to support real-time data sharing between electronic medical record (EMR) and practice management systems on the provider side and core administration and utilization management systems on the payer side,” explains Gary Meyer, strategic healthcare markets executive at Cognizant. “These different systems in different organizations have never been able to ‘converse.’ Now with this new framework, they’ll be able to exchange information in real time.”
Once the new standards are implemented, prior authorization processing will be revolutionized. As soon as a provider enters an order or referral into the EMR – for something that requires a prior authorization from the payer – the provider will see that a prior authorization is required for that clinical action. Providers and staff will be able to see what diagnostic or other criteria must be met and what supporting documentation must be provided to obtain that authorization. And they’ll be able to complete the prior authorization request via an easy-to-use link within the EMR that includes pre-populated forms with the patient’s medical history already filled in, submitting it directly to the payer using an app integrated into the EMR system.
A process that used to take hours or even days will be streamlined so that it requires minutes, from start to finish. This will make it possible for providers to make more holistic decisions, including insurance considerations, at the point of care.
Change the experiences of consumers as never before
Becoming compliant with the new rules will demand significant technological investment from payers and providers alike. They’ll need to build platforms that support real-time, bi-directional data exchange in accordance with standards that will be shared across their industry. However, this technological transformation will serve as a foundation upon which they can build in the future. It will ultimately enable healthcare organizations to provide patients with unified experiences across the entire continuum of care.
“The healthcare industry is becoming increasingly consumerized,” explains Meyer. “Today’s patients desire and expect much greater transparency from providers and payers. Consider the experiences they receive in other parts of their day-to-day lives: Most food delivery apps, for example, provide online trackers, so that you can see exactly where your order is in the preparation and delivery process.”
“Imagine if you could see the status of your prior authorization request, presented graphically in a format that was just as easy to understand and just as visually appealing,” he continues. “This is exactly what the new standards will make possible. Ultimately, the change will allow healthcare organizations to lower costs and reduce their administrative burden, but it will also make it possible to provide patients will better experiences. This will improve satisfaction rates and boost the overall quality of care.”
The impending changes to prior authorization processing aren’t minor. And they aren’t the only types of regulatory transformation that healthcare organizations will need to navigate in the months and years to come. However, payers and providers that prepare themselves for these changes will also position themselves for future success in what promises to become an increasingly competitive and consumer-driven industry.
“Regulatory issues aren’t just questions about compliance anymore,” says Meyer. “They’re issues of key strategic importance for the company and they need to be treated as such by leadership and boards. Making strategic decisions without understanding this is risky.”
Cognizant helps leading healthcare organizations anticipate trends, drive meaningful change and out-think their competitors. Visit our website to learn more about how we can help you prepare for an increasingly dynamic future.