Why Hospitals Should Consider Automating Prior Authorization

February 6, 2023

Hospitals today are under constant pressure to provide high-quality patient care while operating as efficiently as possible. One area where automation can play a crucial role is prior authorization (PA), or precertification, which refers to the approval process that must be completed before a patient can receive certain medical services or procedures.

 Some Startling Statistics:

• Prior authorization is the number one most time-consuming transaction for providers.¹
• 95 percent of hospitals reported increases in workforce time spent seeking prior authorization approval.²
• 93 percent of respondents reported care delays due to prior authorization.³

Today’s prior authorization processes often rely on inefficient, manual efforts using phone, fax, and web portals. These inefficient processes lead to higher expenses – more workforce hours, turnover, and training. Costs can spiral, with more than 60 percent of denied claims never resubmitted⁴.

Now, more than ever, hospitals should consider automating the prior authorization process. Here are the top reasons why:

1. Automating Prior Authorization Provides Significant Benefits

Automation has many benefits – for your patients, workforce, and your revenue cycle. These include:

• Improved patient care and satisfaction: By automating prior authorization, hospitals can promptly ensure that patients receive the care they need. Delays in obtaining prior authorization can result in patients experiencing unnecessary pain, suffering, or even life-threatening conditions. Automation expedites the approval process, allowing patients to receive the care they need without delay.

• Reduced administrative burden: Obtaining prior authorization is a labor-intensive process that can take up a significant amount of time for the workforce. Automation can streamline this process, freeing the team to focus on other tasks, improving overall efficiency, and helping better manage staffing shortages, which can lead to improved margins a decrease in per patient labor costs. An added benefit is it can also lead to improved job satisfaction and employee retention. 

According to a 2021 AMA Prior Authorization (PA) Physician Survey a significant majority of physicians (86 percent) said the burdens associated with prior authorization were high or extremely high, and a clear majority of physicians (88 percent) believe burdens associated with prior authorization have increased during the past five years.

• Increased accuracy: Automation can help to reduce errors in the prior authorization process. By eliminating the need for manual data entry and relying on electronic systems to process requests, hospitals can minimize the risk of errors and ensure that all necessary information is captured and transmitted accurately.

• Cost savings: Automating the prior authorization process can help hospitals save money in several ways. For one, it can reduce the number of workforce hours required to complete the process as well as saving additional rework costs associated with preventable denials, resulting in labor cost savings. In addition, automation can reduce the risk of errors and improve the overall efficiency of the process, which can lead to cost savings in the long run.

• Improved relationships with payers: Obtaining prior authorization can frustrate hospitals and payers. Automation can improve the efficiency of this process, leading to better relationships between hospitals and payers. By working together more effectively, hospitals and payers can improve the overall quality of care and reduce costs for everyone involved.

2. Get Ahead of New Government Regulations

The Centers for Medicare & Medicaid Services (CMS) has proposed a new rule that aims to streamline the prior authorization process for medical items and services through the use of an API-based electronic process using HL7 FHIR (Fast Healthcare Interoperability Resources) standards. This proposed rule is expected to save providers over $15 billion in the next decade.

As a result of this proposal, hospitals and physicians will be motivated to adopt electronic prior authorization processes. To be eligible for incentives under the new proposal, eligible hospitals, MIPS-eligible clinicians, and critical access hospitals (CAHs) will need to meet a new quality measure in Medicare, which requires that prior authorization be requested electronically using certified EHR technology (CEHRT) through a PARDD (Prior Authorization Requirements, Documentation, and Decision) API.

Although these regulations have yet to be finalized, hospitals will need to start planning for the implementation of an electronic/automated solution in order to meet the 2026 deadline set by the CMS. This will allow them to receive electronic prior authorization communications from payers and be eligible for incentive payments.

3. Industry Challenges Also Come Into Play

Hospitals are facing a number of challenges that prior authorization automation could help address. One major factor is shrinking hospital margins. As healthcare costs continue to rise and reimbursement rates from payers remain stagnant, hospitals are finding it increasingly difficult to maintain profitability. Automating prior authorization can help to reduce administrative costs and improve revenue streams, which can help to mitigate the impact of shrinking margins.

The labor shortage is also a concern for hospitals. The healthcare industry is facing a shortage of qualified workers, which can make it difficult for hospitals to manage the administrative tasks associated with prior authorization. Automating this process can help to reduce the workload for staff, freeing them up to focus on more important tasks such as patient care.

Finally, inflation is another factor to consider. The cost of goods and services is increasing, and this is putting pressure on hospitals to find ways to cut costs. Automating prior authorization can help to reduce administrative costs, which can help to mitigate the impact of inflation.

All the Right Reasons to Automate with the Right Solution

Stop-gap measures can help improve the prior authorization process, but the true solution is automation.

What should you look for in an automated solution? 

To begin, you’ll need a payer policy library and rules engine. This enables a quick determination of whether prior authorization is required and the criteria necessary for a clean submission. It even selects the appropriate submission form.

You’ll also want one solution for anything covered under medical benefits – inpatient/outpatient, acute/post-acute, specialty drugs – as well as infusion, physical, occupational, and speech therapies.

Another priority is providing secure, seamless access to payers, providers and patient data combined with intelligent automation to eliminate mundane data entry. This allows you to move through prior authorization requirements check, pre-submission check, submission, and monitoring – almost entirely hands-free. Just some minimal data entry and go.

Don’t forget about expertise and support. Customer support can make or break an implementation. Talk with customers of prospective vendors for insights into support availability and value.

Automating the prior authorization process can significantly improve hospitals’ efficiency and effectiveness. By streamlining this process, hospitals can ensure that patients receive the care they need promptly, reduce the administrative burden on their workforce, increase accuracy, save money and improve relationships with payers. For these reasons, hospitals should seriously consider automating this process to provide their patients with the best care possible.

About SSI Prior Authorization

SSI Prior Authorization is a hospital enterprise-wide solution with 700+ real-time payer connections that covers anything under medical benefits, including infusion, physical, occupational and speech therapies. To see how it can help you reduce the complexity, costs, and time crunch of the manual PA or pre-certification process, learn more here or schedule a demo.

¹CAQH Index 2021.

²American Hospital Association survey.

³American Medical Association (AMA) poll released in February 2022.

⁴According to the Healthcare Financial Management Association.