The critical need to improve prior authorization processes might have reached its tipping point on Jan. 17. That’s when the Biden administration announced its new mandate — the CMS Interoperability and Prior Authorization Final Rule — designed to effectively speed up the process for Medicare Advantage patients, providers and health plans.
Speed is only one of many inefficiencies surrounding prior authorization. And prior authorization cases are only one slice of the patient population whose cases are reviewed annually by insurers. A movement is underway to streamline authorization processes — and not just prior authorization — using 21st-century tools to guide human decision-making along the way.
New legislation, new tools, new standards
The Final Rule requires certain payers, including Medicare Advantage plans, to provide a specific reason for denied prior authorization decisions and publicly report certain prior authorization metrics. The law requires impacted payers to send prior authorization decisions within 72 hours for expedited requests and seven calendar days for standard requests.
With human resources already strained across the healthcare landscape, the new law seeks to create efficiency but places new demands on teams as they work to comply with the requirements, while also managing existing casework. One thing payers and providers can readily agree upon: the more prior authorization processes can be streamlined, and the simpler those processes can become, the better. Efforts to incorporate technology into the processes that fuel prior authorization decisions are already underway, and it’s expected that prior authorization will undergo massive changes in the next few years.
Payers are using emerging technologies in the realm of artificial intelligence to improve their decision-making and their operations. In fact, a recent McKinsey report has identified utilization management, which includes prior and concurrent authorization, as one of the three biggest opportunities for AI impact for payers. More importantly, they’re using AI tools as new opportunities to collaborate with providers to solve shared problems — not just problems facing the payer. We see this collaborative spirit playing out in the sharing of real-time clinical data between providers and payers to support their joint efforts in care management and value-based programs. And this is just the beginning.
Using technologies to drive mutual benefit for providers and payers can extend to everything from concurrent authorization processes to discharge planning and care coordination. The most innovative payers are using these technologies to enable process improvement and achieve new efficiencies — and also using these as a bridge to narrow the divide between payers and providers.
The net effect? Faster processes and a new standard of collaboration between payers and providers have the potential to reach far beyond the prior-authorization applications being explored today.
Concurrent authorization
Prior authorization invokes a broad category of procedures — from surgeries to imaging, and everything in between. All require the patient, doctor and health insurance provider to collaborate at some level and are commonly based on a review of the patient’s treatment history and evidence-based medicine guidelines. On the other hand, concurrent authorization – or the process by which a patient’s status is categorized as either inpatient or observation — involves only a payer and the hospital’s clinical teams and is a decision that is made while a patient is in an acute care facility, often as the patient’s condition is changing. Because this decision is based on ever-changing clinical information during the stay, and because up-to-date clinical information must be exchanged between the hospital and the health plan to reach this determination, the concurrent authorization process shares many of the same attributes and challenges as prior authorization.
Many of the legacy platforms and associated workflow processes are often older and lack the integrated support provided by AI and other technologies. Finally, the need for transparency in instances of concurrent authorization decisions involving multiple providers is high — as is the need for transparency between payers and providers.
How can the improved collaboration taking place in the prior authorization space improve concurrent authorization processes? Start with the degree of collaboration required among payers and providers. The Final Rule legislation effectively forces more collaboration into the prior authorization process, with shared access to clinical information — updated in real-time and transmitted electronically — a practical necessity. By 2027, payers must implement API technology to automate prior authorizations and exchange information with patients, providers, and other stakeholders. In some places, this transition is already happening today for concurrent authorization processes.
For example, hospitals today are using technology in their concurrent review departments to prioritize case reviews, be better informed of which cases are likely to be approved for inpatient or observation status, and share clinical data with their health plan partners. Those health plans are then using this same technology to access shared clinical data from the hospital, which is updated and visible in real-time, apply AI to help clinicians determine which cases warrant a physician or nurse’s time for deeper review and which cases don’t, and reach status determination in 10 minutes.
Creating Trust as the Ultimate Standard
Payers can position and prepare themselves for a healthcare industry that not only encourages — but relies upon — a higher standard of trust, communication, and collaboration in its everyday processes. Building this trust takes time. Health systems and health plans must work together in a collaborative spirit that embraces tools and technologies that exist today which can help both parties improve administrative efficiencies. They must be more transparent in the data and analytical tools used to support clinical decision-making. And they must work together to hasten the process by which those decisions are made.
Just as the efforts around modernizing prior authorization can help hospitals and health plans work together to create better experiences for themselves and the patients they serve, many of these same principles apply to the concurrent authorization process. Doing so can remove the same unnecessary and unproductive workflows that exist today, instead building collaboration opportunities that speed status determination and reduce friction that degrades trust between hospitals and health systems.
With the advent of AI and other next generation technologies, our healthcare system can dramatically improve inefficient administrative processes. Rather than compartmentalize the challenges that exist in various pockets of care delivery, our industry can apply new technologies across their organizations, multiplying opportunities for more comprehensive and meaningful digital transformation of processes that directly affect patients.
About Michael Drescher
Michael Drescher is a seasoned healthcare and communications professional with more than 20 years of experience helping organizations succeed and navigate complex environments. He currently serves as Vice President of Payer Strategy at Xsolis.
