Prior authorizations remain one of the most complex and time-consuming administrative processes in the healthcare industry. Inefficient processes can aggravate provider abrasion and delay patient care, leading to increased costs and decreased member satisfaction. Transitioning to automated prior authorizations can give health plans the opportunity to streamline administrative workflows, facilitate care delivery, and improve provider relationships.
This article explores the challenges of traditional prior authorization methods, the benefits of automation, and how health plans can implement solutions that not only meet compliance requirements but enable strategic growth.
The Challenge of Prior Authorizations
Prior authorization is the process by which a provider requests approval from a health plan for specific healthcare services to ensure they are covered and qualify for payment. Although essential for care coordination and cost control, the prior authorization process has traditionally been a source of inefficiency and frustration across the healthcare system.
Why Are Prior Authorizations an Industry Pain Point?
For providers, conducting manual prior authorizations via phone, fax, or email can detract from their focus on patient care and cause significant administrative burden. Some of these challenges include:
- Time-consuming Work: On average, providers and staff spend 24 minutes per prior authorization request when using phone, fax, or email according to the 2024 CAQH Index Report. For those working through health plan portals, each prior authorization takes 16 minutes per transaction. Multiply this by hundreds of requests weekly, and it’s clear how much time this process takes away from patient engagement.
- Care Delays: Lengthy approval processes can take days or even weeks, leaving patients waiting for critical treatments or tests. This delay can lead to poorer health outcomes and member dissatisfaction, as well as more costly care in the future.
- Provider Frustration: Complex plan requirements, inconsistent data availability, and low adoption of automated systems can further complicate the prior authorization process, diverting attention from patient care and contributing to provider abrasion.
The Centers for Medicare & Medicaid Services (CMS) recognized the negative impacts of inefficient prior authorization processes and issued the Interoperability and Prior Authorization Final Rule (CMS-0057) in January 2024. Among its requirements are the adoption of HL7 FHIR-based APIs to support real-time data sharing of prior authorization requests between providers and health plans and faster approval timelines, with deadlines approaching for compliance in 2027.
Why Should Payers Automate Prior Authorizations?
Automating prior authorizations benefits all stakeholders in healthcare. For health plans, it simplifies workflows, supports compliance, and generates significant cost savings. It also alleviates the administrative burdens on providers and opens the door to better patient outcomes.
Tangible Cost and Time Savings
The financial impacts of automation are clear. According to the 2024 CAQH Index Report, each manual prior authorization costs approximately $5.28 per transaction, but automation slashes that cost down to $0.07 per transaction. This translates to a savings of more than 98% per transaction—a game-changing improvement when scaled across hundreds of thousands of transactions per year.
For providers, automation saves an average of 14 minutes per transaction, allowing staff to focus more on patients instead of navigating bureaucratic hurdles.
Improving Care Delivery
Automation doesn’t just improve efficiency—it plays a critical role in care delivery. Reducing delays in approvals allows patients to access treatments faster, leading to better clinical outcomes. With fewer administrative bottlenecks, providers can deliver the timely care patients need without additional frustration.
What Capabilities Do Health Plans Need to Address Inefficient Prior Authorizations?
To improve prior authorization processes, health plans must look beyond the basics of CMS compliance. Proactively implementing automated solutions can help improve operational efficiency, reduce costs, and strengthen provider relationships. Payers should look for scalable solutions that offer:
- High Data Capacity: Payers need tools capable of ingesting and sorting high volumes of dynamic business data involved in prior authorizations.
- User-Friendly Workflows: To ensure the system is always up-to-date, health plan administrators should be able to easily input files and have the solution quickly process these changes.
- Flexibility for Diverse Business Needs: Payers need the ability to create multiple decision-making entities to tailor solutions by business line or operational need.
Prior Authorization Catalog from HealthEdge®
Automation involves intelligent technology and rules-based engines that streamline the complexity of prior authorization decision-making.
The Prior Authorization Catalog from HealthEdge is an advanced rule processing engine that automates prior authorization decisions. It is a scalable solution that is designed to handle high volumes of data, enabling payers to support complex decision automation. The tool simplifies workflows for health plan administrators, allowing them to drop a file with updates and have the tool automatically process the changes. Prior Authorization Catalog also supports organizational growth as payers can maintain multiple catalogs for different lines of business or environments.
For organizations that leverage several solutions to manage prior authorization decisions, Prior Authorization Catalog can triage and route incoming authorization requests to the appropriate system for processing.
Automated Prior Authorizations for “Gold Card” Providers
There are many ways health plans can leverage Prior Authorization Catalog and one of the top use cases is Provider Gold Carding. With the Prior Authorization Catalog, a Gold Card provider can submit a prior authorization for a specific service group. The catalog automatically processes the prior authorization based on predefined rules from the payer.
From there, the Prior Authorization Payer Catalog automatically approves, pends, or indicates if authorization is not required based on the member, service group, and provider gold carding combination. This automated decision-making is possible because Prior Authorization Catalog can process significant amounts of data, representing all possible combinations of provider NPIs, CPT codes, date ranges, and more.
What’s Next for Health Plans?
The healthcare industry continues to evolve. Automated digital solutions give payers unprecedented opportunities to reduce administrative costs, optimize workflows, and improve patient experiences. By leveraging integrated tools like Prior Authorization Catalog, health plans can position themselves as industry pacesetters, delivering efficient and effective processes that align with the needs of patients, providers, and policymakers.
With ongoing regulatory changes and the growing demand for streamlined care delivery, now is the time for payers to act. Explore how your health plan can best leverage Prior Authorization Catalog. Contact HealthEdge Professional Services today.