Practice Management | 10 MIN READ

Addressing the Prior Authorization Dilemma

Jon Zimmerman
04/09/2019

Many thoughtful leaders today are starting to focus on the burden that prior authorization puts on our healthcare system. I applaud their efforts to relieve that burden. At the same time, I see the prior authorization process as a symptom of a larger challenge: the need to forge a common language and reduce fragmentation in our healthcare system. Only by addressing this larger challenge will we create a demonstrably more efficient system to deliver and pay for healthcare. This blog post addresses the symptoms as well as proposes some opportunities to resolve the root cause.

Prior authorization burdens many stakeholders in healthcare today. In a survey of physicians last year by the American Medical Association (AMA), 28% reported that issues related to prior authorization led to a serious adverse event for a patient in their care. Three-quarters said prior authorization sometimes leads patients to abandon recommended treatment.  The burden of prior authorization was rated high or extremely high by 86% of physicians surveyed.

Optimizing – not restricting – care

Imagine instead a future where shared evidence-based guidelines are used across multiple stakeholders to optimize health – avoiding unnecessary procedures and drugs and steering doctors and patients to best-practice care. Picture an exam room where patient and provider together view a proposed care pathway that combines clinical guidelines for the patient’s health condition with up-to-date information about their insurance coverage, including out-of-pocket cost estimates. By the end of the visit, patient and doctor have settled on a treatment plan and it has already been authorized by the payer. The patient leaves with a clear idea of their financial responsibility and clear expectations of what to do as an engaged stakeholder.

Pie in the sky? Not according to a diverse group of healthcare stakeholders collaborating to improve the prior authorization process. The collaboration was sponsored by eHealth Initiative and Foundation (eHI), whose mission is to convene multi-stakeholder groups to identify new ways to use information technology to drive high-impact improvements in the quality, safety and efficiency of healthcare. Over the past year, eHI brought together executives representing healthcare providers, private and government payers, employers and vendors to identify and share best practices. For a full list of participants, see eHI’s Prior Authorization Collaborative Project.

The collaboration identified these key points to achieve a seamless prior authorization process that reduces physician burden, improves clinical outcomes and increases patient satisfaction:

1/ Make critical information available at the point of care

Integrating evidence-based clinical guidelines and patient coverage information into the clinical workflow is essential, the eHI group agrees, and it requires active participation by stakeholders from throughout the industry.

Studies show that providing evidence-based clinical guidelines within the clinical workflow increases the likelihood that healthcare professionals order tests consistent with the published guidelines. Seeing patient coverage and cost information during the patient visit could prompt physicians to offer viable alternatives that better fit patient’s coverage and ability to pay. Ideally, clinicians could easily access detailed information on patient history, eligibility, benefits coverage, payer documentation requirements and patient financial responsibility. Products already on the market allow clinicians to see at time of service if a recommended drug is in a patient’s formulary, the out-of-pocket costs and therapeutic alternatives.  Why not apply these learnings and value to the entire set of medical services?

It’s all about getting to the right answer faster.

2/ Reduce the number of services and drugs that require prior authorization.

Having payers designate certain evidence-based guidelines for integration into clinical workflows would facilitate paring down the number of tests, procedures, drugs and other services that need to be pre-authorized. One possibility is to require prior authorization only where healthcare professionals recommend services inconsistent with or not addressed by the clinical guidelines. That would imply a level of trust between the parties, due in part to using a common and defined set of information in the patient and payment contexts.

Where trust is both earned and verified, and where care continues to be consistent with clinical evidence and the patient’s insurance coverage, these instances could be made exempt from prior authorization:

  • Patients who are taking medications chronically
  • Medically stable patients undergoing repeat procedures
  • Medications and procedures with low denial rates
  • Healthcare professionals who historically meet prior authorization criteria (sometimes referred to as “gold carding”) with monitoring for continued qualification
  • Healthcare professionals participating in risk-based payment contracts

 

3/ Promote bundled authorization

The industry executives also urged consideration of alternative payment models that promote bundled authorization for procedures, medications and durable medical equipment associated with a particular episode of care. This change holds the promise of reducing the volume of required prior authorizations and administrative burden to providers who are placing orders. To make this happen, information and process barriers within and between organizations need to come down.

4/ Use existing standards and explore emerging standards

To move forward, the eHI collaborative stressed the need for payers, healthcare professionals and vendors to use existing, industry-endorsed standards whenever possible. These include but are not limited to:

  • HL7’s® V2.x and V3 messaging standards and Continuity of Care Document (CCD) for interoperability of clinical data
  • DIRECT Messaging for simple, HIPAA-compliant, encrypted transmission of Protected Health Information
  • EDI (x12 278) transactions for requesting payer authorization

It’s also essential that federal and state government regulations continue to augment current standards and that all players in the healthcare industry explore incorporating new ones. Emerging standards with the capability to improve the prior authorization process include:

  • HL7 FHIR® (Fast Healthcare Interoperability Resources), a draft standard describing data formats and elements
  • SMART® on FHIR, an open, standards-based technology platform that allows innovators to create apps that seamlessly and securely run across the healthcare system
  • CDS Hooks, a technology from SMART on FHIR that allows third-party clinical decision support systems to register with a clinical workflow using a “hook” pattern

Transparent and frictionless prior authorization that optimizes health care may sound futuristic, but the eHI collaborative considers it achievable. An important element is having players across the healthcare marketplace adopt and share their information, requirements, processes and implementation roadmaps as new standards and operating rules are endorsed. By increasing transparency with real-time access around clinical guidelines, benefit coverage and payer requirements, we can greatly remove waste and increase patient and provider satisfaction – along with our nation’s health.

Is your organization using these standards to streamline prior authorization? Post a comment on our Facebook page and tag it #streamline. In my next post, I’ll discuss progress to date in tackling the interoperability challenges that hamstring our ability to achieve better care at lower cost.

 

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