How can electronic prior authorization software and pre-certification processes help a healthcare organization improve their revenue cycle?  Pre-certification, better known as prior authorization, is the process in which an insurer or payer decides whether a prescription drug, medical service, or medical device is necessary and approves the treatment.  While emergency situations do not need this authorization, typically prior approval must be met before the health plan will allow the patient to obtain treatment.  We take a look  at these electronic, streamlined systems for pre-certification.

Prior Authorization

Prior authorization is the process of establishing medical necessity for a medical service, medication, or device.

Because of dynamic influences, tightening budgets, shifting payment models, and new billing requirements – hospitals, ambulatory surgery centers, and providers are forced to identify new ways to improve revenue cycle management in order to increase profits. In a Becker’s Hospital Review article, Jenni Alvey, CFO of Indianapolis-based IU Health, stated:

“…as healthcare reimbursement is changing, the rules around getting people and services authorized, ensuring things are medically necessary and ensuring you’ve done everything you need to for the payer to actually pay for that visit is becoming more difficult.”

Net Revenue Enhancement Driven by Optimized Patient Access

Becker’s Hospital Review recently spoke with thought leaders from Prism Healthcare Partners to hear their views on what they believe to be the most pressing issues for executives from healthcare organizations in 2017. John Storino, the managing director at Prism, “recommends the path to building an optimized revenue cycle in this environment begins with a practical and realistic assessment of available resources.” Whether these efforts are conducted internally or outsourced, improvements must be driven by objective metrics focused on cash flow, cost of collection efforts, net revenue realization and above all – patient convenience.

Net revenue enhancement is often achieved by improving patient access, according to Nick Petrus, the director at Prism. By preparing adequately for patient visits in advance, timely reimbursement is more likely to be achieved, rather than appealing an otherwise valid claim later. He explains that. “The benefits of insurance verification, prior authorization and pre-certification are paramount. When a strong patient access operating model is the first part of an otherwise cohesive revenue cycle, the opportunity for additional net revenue enhancement is significant, and a comprehensive operational assessment can yield realistic and sustainable benefits including more efficient staffing and greater budget efficacy.”

Electronic Prior Authorization Software Saves Money

A report looking at data from 2015 published by the Council for Affordable Quality Healthcare (CAQH), sheds light on prior authorization and the costs of manual versus electronic processes. The following statistics were revealed in the survey:

  • Only 18 percent of providers used electronic prior authorization software in 2015.
  • In 2015, the average cost for an entirely manual authorization was $7.50 compared to only $1.89 for a fully electronic prior authorization.
  • The CAQH estimates that more than $400 million could be saved if health plans and providers moved to 100 percent electronic prior authorizations.

Improve Revenue Cycle Management with Prior Authorization Software

When Mark Noby of the Minnesota-based Mayo Clinic was asked by Becker’s Health Review what was one thing he would do to improve revenue cycle processes, his answer was:

“Creating a data driven process would help meet the operational challenge of increasing pre-certification and prior authorization requirements by private or government payers.”

Adopting an electronic prior authorization system offers an opportunity to reduce complexity and improve overall revenue cycle operations according to a recent article in Search HealthIT. The article describes how cumbersome and time-consuming the process of manual prior authorization request and approval can be. In fact, the American Medical Association found in a 2017 survey that providers and their staff members spend and average of 16.4 hours per week completing prior authorizations.

How Electronic Prior Authorization Differs From Manual Prior Authorization

In sharp contrast, the electronic prior authorization process is streamlined, and is different from the manual process in the following ways according to the Search HealthIT article:

  • The first outreach to the payer that determines whether a prior authorization is needed is automated.
  • “Prior authorization requests and submissions use a guided workflow in which software auto-fills key patient demographic and payer data from other provider system integrations, enabling a more streamlined authorization process.”
  • The status inquiry step is automated and appropriate notifications are sent to administrative staff of the provider.
  • Efficiency and efficacy are greatly improved by the near elimination of phone and fax use in the process, which is replaced with computers.

The SSI Authorization & Pre-Certification application initiates a real-time authorization/pre-certification (278) request at the earliest point in the registration process. With SSI Authorization & Pre-Certification, providers can reduce claim rejections and improve their cash flow. Learn more about our Access Management solutions here, or request a live demo today.