Should Hospital Prior Authorization be Outsourced? A Critical Analysis

Time to Consider Outsourcing Hospital Prior Authorization

Outsourcing of business processes, especially those that are resource or time-intensive, or a bit of both, is not a new practice. Outsourcing tedious administrative or operational tasks, in particular the kind of responsibilities that besot back-office personnel and frequently leave them flummoxed and overwhelmed, is a frequent sight across the world. When it comes to Hospital Prior Authorization, it’s no difference.

Prior Authorization is a demanding task in itself, requiring a good deal of time and persistence. It is widely considered to be among the lengthiest and the most troubling parts of the entire billing process, a fact that owes much to its insistence on clinging to antiquated methods involving tons of paperwork, faxing and making tedious telephone calls. In the context of a large healthcare venue like a hospital, Prior Authorization can easily assume very severe proportions. With hundreds of patients receiving prescriptions from dozens of departments, the Prior Authorization burden on a typical day can get really daunting, a situation made only worse with an understaffed or incompetent billing or back-office department.

In Search of Effective Crisis Management

The crux of the matter is, Hospital Prior Authorization is an area of work that requires a dedicated and specialized approach. Every respectable healthcare organization worth its salt needs to treat Prior Authorization with a certain degree of respect. It is not something to be taken lightly, or treated within your revenue cycle management as an afterthought, but given its due importance in the scheme of affairs. The drive to outsource hospital Prior Authorization to dedicated, third-party billers and other revenue cycle management (RCM) service providers, stems from this realization.

A deeper analysis reveals that reducing the stress on the regular hospital staff or engaging dedicated assistance to get more PA requests done in less time, are not the only advantages of outsourcing. Professional intervention in billing affairs has always been known to produce highly beneficial effects on the entire revenue generation cycle. A few of the common benefits include a lowering of denials, a quickening of the process through streamlining and an overall increase in collections.

The greatest advantage, however, lies in the fact that with outsourcing, providers can bypass all the usual hassles of having to find, train and recruit fresh personnel to handle their billing affairs. They can now enjoy instant access to a ready pool of billing and coding professionals, available to start working immediately at a highly competitive hourly rate.