Driven by the ongoing trend of higher copays, increased participation in high-deductible healthcare plans, and claim denials due to prior authorization issues, patient out-of-pocket expenses are at an all-time high.
Patients are now responsible for approximately 30% of healthcare spending, and these added expenses contribute significantly to patient dissatisfaction. At the same time, laboratories and other diagnostic providers are under immense pressure to reduce costs, improve operational efficiency, enhance quality, and maintain regulatory compliance.
Patient expectations and engagement in healthcare decision-making are also growing. Laboratories and other diagnostic companies, including independent diagnostic testing facilities (IDTFs), have an opportunity to enhance patient and physician satisfaction by providing tools that decrease costs and increase access to the diagnostic tests or health monitoring that their physicians recommend.
One such opportunity that is ripe for improvement is the prior authorization (PA) process. It’s no secret that prior authorization requirements create a time-intensive challenge that delays patient care and pull providers and staff away from clinical activities to spend time with administrative tasks and paperwork. Further complicating the matter, health plan prior authorization policies continue to add requirements, which further burdens clinicians and diagnostic professionals.
Getting prior authorizations submitted remains a complicated process with many manual steps. Unlike other types of pre-treatment services, prior authorizations require a high level of communication and coordination between physicians, diagnostic providers, and payors. There is an extra wrinkle for diagnostic providers specifically. The date of service for a laboratory test is often the date the specimen is collected. Payers may or may not accept “retroactive” authorization requests. That’s why it is exceedingly important to understand the specific payer rules, timelines, and filing requirements.
The impact of prior authorizations on laboratories and other diagnostic providers is immense. Based on client data, XIFIN identified a 311% increase in prior authorization-related denials. This has a significant effect on diagnostic providers’ labor requirements and profitability. Women’s health prior authorization-related denials, for example, increased by more than 60% in the 24 months leading up to September 2019. This creates a financial impact of close to $100 per procedure for non-invasive prenatal testing providers. Likewise, cardiovascular disease-related prior authorization denials rose more than 54% over the same 24-month time period.
Clearly, PA remains a complex problem that affects laboratories, medical device companies, providers, and patients alike. To address these challenges, diagnostic providers who take a multi-pronged approach to tackle prior authorizations are better prepared to handle the changing the prior authorization requirements and protect their revenue.
First, diagnostic leaders should ensure that their workflow solution or laboratory information system (LIS) and revenue cycle management (RCM) solution can handle prior authorizations. At their most basic – they should be able to manage workflow when a prior authorization is required and be able to capture the prior authorization number. Other capabilities such as document storage, web services, portals, and PA specific automated denials and appeals management are a requirement.
Second, partnering with purpose-built software and services organizations that specialize in prior authorizations can further optimize workflow and potentially augment revenue cycle management processes and teams. Some diagnostic providers engage directly with prior authorization partners, while others work with their technology partners to acquire prior authorization expertise. These types of optimization partners work with diagnostic providers to create new efficiencies, reduce denials, and improve appeals success — ultimately enabling physicians to provide more timely care to patients and improving diagnostic provider reimbursements.
There are three different types of purpose-built prior authorization organizations that diagnostic providers should consider.
Some PA providers offer software that facilitates electronic prior authorization submissions, allowing speedier submission process and reducing manual efforts, which can be prone to error. The software ensures cases are routed to the appropriate benefits manager or payer in the format they accept. Some incorporate insurance specific criteria to improve success rates. The software typically also facilitates tracking of all prior authorizations, while some provide real-time notifications on each case. Using PA software allows diagnostic providers to streamline their workflows, reduce the number of denials, and expedite the PA decisions so that patients gain access to the important diagnostic information they and their physicians require.
There are PA organizations that are solely service-oriented. Diagnostic providers that are interested in outsourcing their PA process may want to consider these types of companies. Although automating as much of the prior authorization process as possible should be the goal for diagnostic providers, we know that sometimes human intervention is required. These service-only organizations may be able to help.
Alternatively, some organizations offer a combined technology and services type model. These types of PA companies have both specialized software and also have a team of specialists for those PAs where human intervention is needed. The integration of technology and prior authorization specialists can provide laboratories and other diagnostic services providers complete coverage of their prior authorization workflow from determination, initiation, verification, and follow-up of each authorization.
PA software is becoming more sophisticated. With AI-driven technology, in particular, treatment plans can be assessed for individual payer PA requirements, submitted electronically, and monitored for approval or follow-up automatically. Approvals can then be routed to the scheduling department in real-time and the PA can be still be processed without interfering with team workflow if it’s determined that follow-up or exception handling is required.
Enhancing existing RCM technology and processes through these kinds of partnerships allows diagnostic billing teams to track prior authorizations in real-time, reducing the turnaround time in providing decisions to both physicians and patients. By bringing these capabilities together, diagnostic service providers will also increase revenue by reducing prior authorization-related denials.
Diagnostic providers may choose to work with one or several PA partners. How is that decision made? It depends on multiple factors, including:
- Procedure/test menu
- Payer mix
- Existing RCM technology capabilities and interoperability.
- Willingness to automate
- Services options
Together, these PA companies reduce the administrative burden, cost, and complexity associated with prior authorizations. Diagnostic companies now have multiple options to secure and manage prior authorizations for proprietary, esoteric, and toxicology testing and remote patient monitoring. Making use of these solutions can improve workflow, expedite payments, and maximize reimbursements. Diagnostic providers can leverage and benefit from enhanced revenue cycle management automation, including frontend payer and CPT code-specific workflow configuration, backend exception processing, and automated appeals workflows.
Laboratories, hospital outreach programs, and molecular diagnostic providers (among others) can facilitate patient access and improve their bottom lines through reduced costs and improved revenue capture with today’s advancements in technology. When weighing the benefits of these technological advancements, consider that the financial savings recognized by applying automated and AI-driven software solutions far outweigh the cost for acquisition and implementation — both in terms of labor required and captured revenue. Equally important are the additional time and resources providers can spend providing patient care.
Source: RevCycle Intelligence