Prior Authorization’s Jarring Reality (and How to Cope with It!)

Prior authorization, also known as preauthorization, is the utilization management process leveraged by health insurance companies. Prior authorization services require healthcare practices to get approval for certain procedures, tests and medications before administering them to the patients. The whole objective of prior authorization is to assess medical necessity and streamline the cost of care of specific procedures, tests and medications without incurring unnecessary expenses.

Prior authorization, therefore, ensures less expensive treatment options instead of defaulting to the costly treatment options. Without prior authorization approval, the insurance company may not pay for the rendered services.

There are two types of prior authorization services viz. soft PA and hard PA.

1) Soft PA:

This is a frequently practiced prior authorization process. The six steps of handling soft PA are as follows (using an example of prescribing a specific medication that requires PA according to the patient’s Health Plan):

1. The doctor prescribes medication.
2. The pharmacy checks if the prescription needs prior authorization.
3. If it does, the pharmacy informs the doctor.
4. The patient then decides to pay out-of-pocket or proceed with insurance.
5. If using insurance, the healthcare practice contacts the insurance company, fills out the necessary forms, and submits a formal request.
6. Once approved, the medication is provided to the patient, and the insurance covers the cost.

2) Hard PA:

When a physician resubmits an authorization request with more information after it is initially declined by the insurance company, it is called the Hard PA process. Denials can happen due to application errors or if the insurance company suggests a different treatment. This process can be lengthy as approval only happens after all required criteria are met. Once everything checks out, the medication is approved.

To avoid PA rejection, you need to know about what causes denials.

Reasons for Prior Authorization Denials

More than half the time, prescriptions are sent for prior authorization from the pharmacy. However, only a few patients receive the exact medication their doctor prescribed. The rest either abandon their treatment or become more frustrated with their healthcare service. The reason? Often, the physician’s prescription is illegible, or the prescribed medication is not necessary for the diagnosis.

One needs to know about the prescription drugs that often require prior authorization. So here is a quick list of some commons types of prescription drugs that need prior authorization approvals.

• Drugs with significant side-effects
• Drugs not suitable for the patient’s age
• Drugs with higher-than-normal doses
• Cosmetic drugs (e.g., for hair growth)
• Expensive drugs for serious conditions
• Medicines for non-life-threatening conditions
• Prescribed drugs that have a less expensive but equally effective generic alternative
• If the prescribed drug is not covered but is medically necessary, the physician must confirm that other alternatives are ineffective for the diagnosis.

The truth is that prior authorization is not an easy game as it requires a considerable amount of administration, communication and paperwork. Some of the key challenges that come with prior authorization are:

1) Eating up physician’s time:

Physicians and medical staff often express frustration with managing prior authorization services, while patient care is the priority for them. When the pharmacy informs the practice about the need for prior authorization, physicians and staff must handle the verification and communication process, which takes a lot of time.

Even after submitting the PA request, they need to do frequent follow-ups and ensure all forms have the correct information. This is frustrating and time-consuming, leaving them overwhelmed and searching for alternatives to the PA process.

2) Cost for PA process:

According to a recent study conducted by Healthy Affairs, practices spend an average of $68,274 per physician per year interacting with health plans, which amounts to $23 to $31 billion annually. Physicians across the nation have always reported that they are spending a substantial amount of time connecting and following up with insurance companies and completing the entire process of prior authorization services. The total amount of time at the end of a fiscal year costs too much for healthcare practices.

3) Delay in patient care:

Due to the time-consuming nature of the pre-auth process, patients often experience delays in receiving treatments and medications. Being frustrated, a lot of patients leave the treatment in the middle. This causes concern for patients as they do not have control over their health due to the PA process.

4) Prior authorization management:

The PA management process can be an overwhelming affair for a practice with amateur PA management staff members as every insurance company has its own set of Prior Auth rules. The process of PA submission also differs from payer to payer. There is no standardized process for managing PA.

Some Common Factors that Cause Delays in PA Approvals

• Incomplete PA steps from the pharmacy and physician
• Missing or incorrect information on forms (e.g., DOB)
• Improper billing information from the pharmacy
• Outdated insurance information
• Claiming PA to the wrong payer
• PA approved by the insurer but not communicated to the clinic or pharmacy
• Expired approvals
• Physicians not meeting payer guidelines (most common)

To avoid all the PA-related hassles and administrative burnout, most healthcare practices prefer to outsource prior authorization services to third-party medical billing companies. You can also partner up with a prior authorization specialist to enjoy some very distinct benefits.

Read More:

How Does Prior Authorization Impact Patient Health Outcomes?

Prior Authorization is carried out for processes like providing a costly drug, determining the medical necessity to analyze the need for the same. Read to know more about how does prior authorization impact patient health outcomes?

Benefits of Outsourcing Prior Authorization Services

1) Offer patients a better experience:

Working with a prior authorization service provider allows you to free up your time and resources from PA management so that you can ensure better clinical care for your patients. A professional PA management partner benefits your practice with on-time PA approvals.

2) Skilled professional:

Prior authorization professionals are experts in handling health insurance prior authorizations. They use advanced tools and digital platforms to simplify patient care and reduce your practice’s operating costs.

3) Save expenses and boost revenue:

Choosing a reputable prior authorization professional lets you use their proven techniques and tools to reduce costs, save money for your clinic, and improve payment cycles and reimbursements.

If you are looking for a perfect pre-authorization company, consider Sunknowledge as your next-door solution. Sunknowledge Services Inc. is a top pre-authorization company providing a range of medical billing services to clients worldwide. Our experienced team helps healthcare providers simplify the pre-authorization process, so they can focus on delivering excellent patient care.

We offer cost-effective and reliable solutions for healthcare organizations of all sizes across more than 30 specialties. Outsource your prior authorization services to Sunknowledge Services Inc. and let us improve your practice while ensuring full compliance with industry standards. Our easy setup process will have you up and running in days.

Contact us today for a customized Prior Authorization success plan!