Prior authorization, a term regularly used in the field of medical billing, has a lot to do with the ethical code of conduct in the healthcare business. Prior authorization can be defined as a process that healthcare providers are required to follow before prescribing certain medical treatments or medications to patients. In simple terms, the process involves obtaining approval from a patient’s insurance provider to ensure that the treatment or medication is covered under the patient’s plan.
While the process of prior authorization is intended to prevent unnecessary or costly treatments, it has become a controversial and burdensome aspect of medical billing. In this article, we will explore interesting facts about prior authorization in medical billing.
Cost of Prior Authorization
It is observed that the process of Prior authorization can be a time-consuming and costly process for healthcare providers. According to a recent study carried out by the American Medical Association, the cost of prior authorization to healthcare providers is estimated to be $32 billion annually. This includes the cost of staff time, administrative fees, and the cost of medical treatments that are delayed or denied due to the prior authorization process.
Increased Prior Authorization Requests
Due to the rise in acceptance of the concept of prior authorization, the number of prior authorization requests has increased significantly in recent years. In a recent survey research conducted by the American Medical Association, 91% of physicians reported that the number of prior authorization requests has increased over the past five years. And due to this, there has been an increase in time investment for physicians, with over 28% of physicians spending more than 20 hours per week dealing with requests for prior authorization.
Impact on Patient Care
According to a survey by the American Medical Association, 92% of physicians reported that prior authorization delays or denials have a negative impact on patient clinical outcomes. This can lead to delayed or denial of treatments, which can negatively impact patient health outcomes.
Complexity of Prior Authorization
The process of prior authorization is complex and confusing for most healthcare providers. Different insurance providers have different prior authorization requirements, which can vary depending on the specific treatment or medication being requested. Having a separate department for handling prior authorization can result in a significant administrative burden for healthcare providers, who must navigate a complex and constantly changing landscape of prior authorization requirements.
Role of Technology in Prior Authorization
Technology will surely play an increasingly important role in the prior authorization process in the medical industry. Electronic prior authorization (ePA) systems allow healthcare providers to submit prior authorization requests electronically. The use of EPA will help in reducing the administrative burden associated with the process. Additionally, artificial intelligence (AI) and machine learning algorithms can be used to analyse prior authorization data and predict the likelihood of a request being approved or denied.
Steps Taken to Streamline Prior Authorization
In 2018, the Centres for Medicare and Medicaid Services (CMS) announced a new program called the “Patients Over Paperwork” initiative, which aims to reduce the regulatory burden on healthcare providers, including the prior authorization process. Added to this, many states have implemented legislation aimed at reducing the administrative burden associated with prior authorization.