Prior authorization (PA) is essential for health insurers to manage value, as it allows them to assess whether a medical service or drug requested by a clinician is necessary, as well as to ensure services aren’t being duplicated. Unfortunately, health care providers and patients in the US are increasingly negatively impacted by cumbersome PA processes. The latest survey of physicians by the American Medical Association (AMA) on prior authorization turns up some troubling (if not surprising) findings regarding how PA affects patients:
- 79% of respondents reported the PA process has led to patients abandoning treatment
- 30% report that PA has resulted in a serious adverse event for a patient in their care
- 21% report that PA has led to a patient’s hospitalization
- 27% report that PA has led to a life-threatening event, required intervention to prevent permanent damage, or led to permanent disability or death
For clinicians, the PA process represents a huge drain on staff time and resources, which can contribute to burnout and result in less available time for patient interaction. According to the AMA survey, practices complete 40 PAs per physician each week, while physicians and staff spend two full days (16 hours) each week filling out and submitting PAs. Two in five physicians said they have staffers who exclusively work on PAs.
Provider organizations like the American Medical Association and the American Hospital Association understand the frustrations behind these figures, and have been vocal about how PA causes care delays and robs clinicians of time they could be spending with patients.
Federal and state governments have recently responded with new regulations intended to speed and standardize the PA process. Some of these rules, such as those mandating FHIR interoperability and turnaround time standards for rendering decisions, are positive steps towards increasing transparency and expediting the PA process to reduce patient delays.
However, other mandates—such as a rule that would essentially eliminate PA for many services by “gold carding” providers who meet certain approval thresholds—will increase PA complexity and hinder one of a health plan’s most important tools for impacting care cost and quality. How will health plans identify which providers qualify for gold carding, and how can they appropriately enforce different processes for different providers?
These regulations will force health plans to rethink their utilization management technology. While plans might be tempted to view emerging requirements as an additional burden, they also represent a strategic opportunity. As these regulations will necessitate a new approach to PA technology, why not reimagine the PA process itself?
Here is a little background on some of the most significant regulations:
- In December 2020, the Centers for Medicare and Medicaid Services (CMS) published a new rule to “improve the electronic exchange of health care data, and streamline processes related to prior authorization, while continuing CMS’s drive toward interoperability, and reducing burden in the health care market.” While this proposed rule has not been finalized, CMS has said it intends these policies to go into effect on Jan. 1, 2023, less than 16 months from now. These are sensible rules that will speed the PA process and remove manual burden.
- Congress is pushing for legislation to improve the PA process. A bipartisan bill introduced in May 2021 seeks to stop the use of faxes for PAs submitted to Medicare Advantage plans and calls for implementation of technology to enable real-time PA decisions. While implementation of these rules would be expensive and time-consuming, the result would be much faster decisioning for PA requests, with less manual effort and cost.
- The state of Texas recently enacted a law that allows physicians with a proven track record of insurer approvals (90% or higher) to earn a “gold card” exemption from payer PA review requirements for certain treatments and prescriptions.
- In New York, revisions to insurance and public health laws require commercial and Medicaid payers to make PA decisions for inpatient rehabilitation services following an inpatient admission within one business day after receiving the request and supporting information. The revision also cuts the maximum amount of time for standard appeals from 60 days to 30 days.
The Texas regulation, which went into effect September 1, 2021, is especially problematic for health plans on legacy technology platforms. The law requires that most Texas health plans enable gold carding for physicians who have received authorization on 90% of their requests within a prior six-month period. As many medical service types receive 90% or higher approval rates, most or all physicians will be eligible for gold carding for these services.
Contrary to the law’s intentions, indiscriminate approvals will likely have a negative impact on patients over time, as forcing health plans to approve medically unnecessary utilizations will ultimately drive up health care costs and lead to higher premiums. And because the Texas regulations apply only to specific types of health benefit plans, providers will be confused over whether gold carding applies for a plan’s specific line of business, while health plans will struggle to administer the rules. Other states and CMS very well may follow suit concerning mandatory gold carding.
Below are some ways plans can use proven technology solutions to comply with new regulations, offset the problems caused by these regulations, and enable forward-thinking care management transformation strategies.
Mandated Gold Carding
To meet the requirements of the new Texas PA regulations, plans will need to invest in technologies that automatically identify providers who meet the gold-carding thresholds and enable those providers to avoid the authorization process for those specific services, while notifying providers in a clear and timely manner of the status change.
While this will eliminate some PA activity, the PA process will remain intact for providers who do not meet the threshold. The regulations will therefore create the additional problem of how to identify, manage, and constantly update separate processes for separate providers, or even different processes for the same provider. Also, because the new rule applies only to specific health plan lines of business, any solution must enable rules configuration at the product level. Health plans will need powerful, modern data and analytics technology to enable these gold-carding capabilities.
Plans will require a technology platform that simplifies the management of an exponential volume of gold-carding rules across combinations of providers, services, and lines of business. Health plans that are committed to implementing this kind of platform might as well invest in one that also can help nudge poorer performing providers toward making higher-value care decisions, as it provides a higher ROI. For example, an intelligent digital platform is capable of analyzing provider performance in real time and suggesting alternative, evidence-based care paths for higher-value care, such as performing the service in an outpatient vs. an inpatient setting. Research shows that providers accept these types of suggestions, or “nudges,” as much as 55% of the time.
Shorter Prior Authorization Timeframes
The CMS final rule proposes requiring most payers to send PA decisions within 72 hours for urgent requests and seven calendar days for standard requests. In addition to the CMS final rule, the proposed Improving Seniors’ Timely Access to Care Act (H.R. 3173) would encourage or require real-time decisions on Medicare Advantage authorization requests. Plans can prepare by implementing a platform that enables simple management of complex PA rules and supports a fully automated, evidence-based clinical review that returns immediate responses to valid authorization requests. Automating clinical reviews can relieve clinical nurse reviewers of 40-70% of their workload, according to some vendors’ client data. For requests that still require manual review, why not prioritize the highest-impact cases and speed the review process by supporting nurses with AI-driven, evidence-based intelligence?
FHIR-Enabled APIs
The CMS proposed rule mandates that impacted payers build and maintain a “document required lookup service” (DRLS) API that is enabled by the Fast Healthcare Interoperability Resources (FHIR) data structure standard and can be integrated with a provider’s electronic health record.
CMS also proposes that payers build and maintain a FHIR-enabled electronic Prior Authorization Support (PAS) API with the ability to send PA requests and receive responses electronically within their existing workflow (and while maintaining the integrity of the HIPAA transaction standards).
Payers can meet both CMS-proposed requirements by deploying a PA platform that includes advanced integration technology and is compliant with new standards (such as FHIR). As health plans invest in technology to comply with these new requirements, they should also ensure that their integrated platform of choice has the intelligence to “learn” from EHR data. Enabling continuous machine learning will help providers make better and more patient-specific suggestions, and will also contribute to the creation of an intelligent care plan that anticipates the patient’s future care journey.
Conclusion
Health plans still relying on manual or partially automated PA processes will clearly need to invest in technology to comply with upcoming regulations. This PA transition provides an invaluable opportunity to abandon manual PA processes and embrace automated PA technologies that not only support compliance, but also enable new, strategic capabilities. Turning regulatory lemons into lemonade will pay off in the transformation of routine utilization management into better clinical outcomes, cost control, and proactive care.
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About the Author: Cohere Health
