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True Impact of the Patient Prior Authorization Process

August 31, 2016

Patient Prior Authorization Process

Prior authorizations are the bane of primary care providers everywhere, sucking up time and valuable resources from both your the front and back office staff. You’ve probably given more than passing thought to the irritations involved in the process, but you probably haven’t considered the impact on your bottom line. 

Although the trend is toward fewer prior authorizations, there’s no evidence they’re going away any time soon. Here’s some insight into the scope of the problem and some ways to make it easier on your practice. 

The True Cost of Patient Prior Authorizations

A recent study in the “Journal of the American Board of Family Medicine” estimated that the mean cost per full-time provider for prior authorization compliance was between $2,100 and $3,400. Keep in mind, this figure accounts only for the provider’s time, not including the time of other credentialed staff and front office employees. In 2009, the most recent year comprehensive figures were compiled, the average primary care nurse spent 13.1 hours per week on patient prior authorizations and clerical staff spent 5.6 hours per week on prior authorization-related tasks. 

Altogether, according to research published by “Health Affairs,” the annual cost of compliance with insurance-mandated prior authorizations is between $23 billion and $31 billion per year. It doesn’t take a CPA to tell you that keeping up with the never-ending prior authorization paperwork is a drain on your practice’s profit. 

The Biggest Payer Offenders

According to research from the American Medical Association, who analyzed a large number of claims for their 2013 National Health Insurer’s Report Card, not all payers are equal in their prior authorization burdens. Check out these statistics about the percentage of claims requiring a prior authorization:

























Most prior authorizations involve imaging studies and medications, and the Government Accounting Office reports spending on advanced imaging studies has increased at a much more rapid rate than less expensive studies, which may be driving some of the increase in prior authorizations. On the other hand, the wider availability of inexpensive generic drugs reducing some of the paperwork burden for medications.

Lowering the Cost of Compliance for Your Medical Practice

Prior authorization is an unavoidable cost of running a medical practice, but there are some steps you can take to lower the drain on staff hours. 

  • Evaluate your insurance contracts to see which payers require the most prior authorizations. If it’s a contract that isn’t a major part of your revenue, and it’s taking an inordinate amount of time in compliance, consider whether you really want to participate when it’s time to renew. 
  • Use the payer’s website whenever possible to get authorization; phone service takes much longer. 
Related Article: 3 Effective Tips to Enhance Patient Engagement
  • Centralize the prior authorization process with just one or two staff members. This streamlines the procedure and facilitates forming personal relationships with major payers, making things move more quickly and easily. 
  • Familiarize yourself with your main plan formularies and develop treatment protocols around medications covered by the plan that don’t require prior authorization for the conditions you treat most, provided it’s medically appropriate for the patient. 
  • Use your EHR to capture demographic information and progress notes supporting medical necessity for use when a payer’s utilization review department will need it for prior authorization for advanced imaging studies and other procedures. Be sure you know the authorization criteria for each payer so your EHR form captures everything that will be required to get the approval. 

If the prior authorization process is affecting your bottom line and you’d like help getting your paperwork burden under control, contact the billing professionals at M-Scribe for a consultation outsourcing just that function. 

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