Fixing Healthcare’s Achilles’ Heel—Prior Authorization  

Healthcare providers jump through hoops to get payer approvals but are constantly challenged by prior authorization protocols and medical necessity denials. As one of the biggest bottlenecks in revenue cycle management (RCM) and care delivery, prior authorization challenges also leave patients in limbo, waiting for the green light to get treatment.  

What was originally designed as a healthcare cost-control measure is now victimizing the stakeholders it was supposed to benefit. It’s no wonder prior authorization has now turned into healthcare’s Achilles’ heel, causing delayed care for patients and drained revenue for providers.  

Recent studies paint a grim picture of the implications prior auth delays have on patient access to care and healthcare reimbursements, further raising alarms for the need for prior authorization reforms and strategic RCM interventions. Payer transparency with respect to claim denials, stipulated response times, and transition to electronic prior authorization (ePA) systems can help smoothen this bumpy road.  

1. The Missing Piece of the Puzzle: Why Denials Deserve Better Explanations

Picture a scenario where an urgent medical procedure prescribed by a healthcare provider is denied by the insurance company without a clear or valid reason. This isn’t an isolated episode. The industry is rife with examples like these where prior authorizations are denied, leaving providers guessing the reason and struggling internally to fix it—while their patients suffer.  

Going by the 2024 AMA Prior Authorization Physician Survey, nearly 93% of physicians reported prior authorization-related care delays. Moreover, 1 in 4 acknowledged serious adverse events like hospitalization or death due to these delays.  

Guess what’s a common complaint among providers? Cryptic or inadequate explanation for denials—yes, providers often find themselves navigating denial management with guesswork. This often ends up in needless paperwork and high administrative burden and costs. 

The Fix 

Payers should provide healthcare providers with a clear explanation for every denial. This will help them strengthen their denial prevention strategy and streamline patient access. Payer transparency and a complete understanding of the nature of denials can empower providers to adjust or appeal effectively, ensuring the process doesn’t disrupt the treatment plan for their patients. Moreover, it helps minimize unnecessary administrative back-and-forth, saving them both time and resources. 

In this regard, the CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F), issued in 2024, aims to mandate payers to specify the denial reason from a standardized industry list when refusing a request. This move will help providers address denials promptly and determine if they need to modify documentation or raise an appeal. 

While the reform would help bring transparency to the prior authorization process, RCM leaders must internally perform regular audits and root cause analysis (RCA). This will help them understand denial patterns to prevent their revenue from slipping through the cracks.

2. A Ticking Clock or Bomb: Why Legislating Timelines Is the Need of the Hour

Healthcare shouldn’t be a waiting game for patients. It should be about making care accessible to them when they need it. Yet prior authorization challenges delay critical treatments. More than 80% of the physicians in the survey reported treatment abandonment by patients due to the long-drawn-out process. Additionally, over 30% reported that prior authorization requests are often or always denied. Even worse, physicians end up spending over 13 hours every week on the process. This causes their underutilization for care delivery but overutilization for other tasks, which adds to their healthcare administrative burden. 

The Fix 

While Texas has already implemented legislations mandating response times for prior authorization decisions to enforce accountability among payers, there is a dire need for the nationwide implementation of such laws to improve patient access to care. Such laws can make healthcare more patient-centric, improving not just health outcomes but also physician utilization with timely care delivery.  

The Final Rule sets the response time for payers for prior authorization requests, marking 7 days for standard requests and 72 hours for urgent ones. 

Revenue cycle leaders too can expedite the process with RCM automation and SOP-driven documentation that conforms to payer behavior and requirements. Technologies like automation for streamlined workflows, AI for denial RCA, and analytics for critical KPI can help expedite approvals by boosting process efficiency.

3. From Fax to Digital: Why Digital Transformation Is No More an Option for Providers

Traditional means of communication continue to be another cause of prior authorization delays. Despite advancements, many physicians still rely on traditional fax or manual processes for submitting requests. Such processes not only have an increased risk of errors but also greater turnaround times, which further adds to delays.  

The Fix 

Digitizing prior authorization can not only expedite the process, making care accessible to those who need it, but can also help providers save substantial costs while improving their operational efficiency. 

The CMS’s groundbreaking move toward prior authorization digitization with the Final Rule aims to expand access to healthcare data through electronic information exchange and reduce the burden on providers and patients while saving around $15 billion over ten years.  

The rule requires impacted payers to implement a Health Level 7 FHIR prior authorization API to automate the process end-to-end. It also requires eligible physicians to report their use of payers’ prior auth APIs to submit electronic requests. By automating their workflows and leveraging ePA systems, providers can track the claim status and speed up the turnaround time for their requests. This will significantly reduce their administrative burden, empowering them to improve patient outcomes by preventing avoidable delays.