- June 1, 2022
- Posted by: David Smith
- Category: Prior Authorization
Prior Authorization – The Essential Evil?
Prior authorization, the formal requirement by insurance companies that certain medications and medical procedures be ‘pre-approved’ by them so that they may be covered under the patient’s health plan, is not a recent phenomenon. The idea that insurance companies could influence how patients should be treated emerged in the 1980’s, when insurers began requiring pre-approval for some hospital admissions and high-cost procedures before they would agree to pay for them. In the following decades, the requirement was extended to new high-cost drugs and medical equipment meant for therapeutic use (such as Durable Medical Equipment, or DME).
While the raison d’être of prior authorization is undoubtedly a noble one – being keeping healthcare cost under control, avoiding unnecessary over-medication and ensuring patient safety – it also puts a major strain on the time and resources on the typical medical practice. Doctors have complained, time and again, that all the paperwork, faxes and phone calls needed to complete the prior auth process, often tend to get out of hand. In fact, the average physician must now seek approval for dozens of prescriptions and medical services each week, an administrative burden that contributes to burnout and costs physician practices an estimated $26.7 billion in time each year!
Looking The Devil in The Eye
Given the above scenario, it is easy to feel tempted to enter into a debate over the true nature of prior authorization. But that is something which is beyond the scope of this article. So, tacitly accepting the fact that prior authorization is a bit of both – good and evil – let’s try to find out what providers are doing to cope with it.
Frustrated physicians across the US are turning to state and federal legislators, hoping elected representatives will force insurance companies to curtail the crushing burden of long-drawn prior auth processes needed to get permission to do what physicians think is right. Till a satisfactory resolution is reached, a large number of them are simply choosing to offload the trouble through strategic outsourcing of the process to specialized, third-party medical billing specialists.
It saves providers not just all the usual hassles associated with pursuing PA requests, but also thousands of dollars in operational cost. Outsourcing means that there will not be any need to recruit and maintain in-house staff or pay for the overhead. Providers are required to pay only for actual hours of work done on their accounts. In other words, outsourcing is an option worth considering if providers are looking to streamline their billing processes, increase collections and simply find more time to spend on other important aspects of their practice, such as actual patient care.