or even avoid covering the cost of these procedures.
Excessive Paperwork and Frequent Requests for More Information
The prior-authorization process, which typically requires the submission of both administrative and clinical information by physicians and sometimes patients, is known for its high administrative burden. According to a 2022 American Medical Association Survey, 88% of physicians report these requirements as highly disruptive and inefficient for practice workflow.
Mandating extensive documentation often leads to additional requests for information, which can result in a cycle of endless correspondence. The AMA reports that the prior-authorization process is responsible for 92% of care delays and 853 hours of wasted staff time annually, translating to a labor cost of $82,975 per full-time physician each year.
Bureaucratic Hurdles
Complex policies and procedures can be difficult for providers and patients to navigate. For instance, a prescription for insulin might be covered by pharmacy benefits, but other items, like test strips or an insulin pump, could fall under the patient's medical benefits. In situations like these, two pre-authorizations need to be submitted – one for pharmacy and the other for medical benefits. Additionally, procedural errors, like a patient completing a medical test before an authorization is given, can lead to payment denials, adding another layer of difficulty for both providers and patients.
Utilizing sophisticated software to assess claims
Utilizing complex algorithms to assess claims, can result in automatic denials or requests for additional unnecessary evidence of medical necessity. Insurers UnitedHealth and Humana are facing lawsuits over the use of the AI model nH Predict in claims processing. The model, intended to estimate patient stays in skilled nursing facilities, has been accused of causing improper care denials for Medicare Advantage patients by basing decisions on its error-prone predictions rather than doctors' recommendations.
Outsourcing pre-authorization
By using an outsourced pre-authorization service, a third party facilitates communication between the practice and the payer (insurance companies or Medicaid). They collect patient information to obtain authorization for inpatient and outpatient procedures, as well as pre-certification for hospital admissions.
While it can be advantageous to free up physician/nurse capacity through a centralized process, we should not gloss over the risks associated with an outsourced service:
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Loss of control: By outsourcing pre-authorization, control of patient care management may be relinquished, which can be a concern for some providers.
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Communication barriers: Effective communication is crucial, and outsourcing can introduce barriers, especially if the third-party service is offshore, leading to potential misunderstandings.
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Privacy concerns: Sharing patient data with an external entity raises concerns about privacy and the security of sensitive health information.
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Service variability: The quality of pre-authorization services can vary widely among vendors, potentially affecting the timeliness and accuracy of approvals.
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Regulatory risks: Outsourcing pre-authorization involves compliance with healthcare regulations, and any lapses by the third party can pose legal risks to the provider.
By transferring the responsibility of pre-authorization to third-party services, insurers effectively sidestep the risk associated with delaying or denying procedure approvals. This practice sets a dangerous precedent within a for-profit healthcare system, where there is a financial incentive for insurers to withhold authorization. Delays in pre-authorization not only prolong the distress of patients but also erode trust in the healthcare system, making it increasingly clear that financial motives are taking precedence over the provision of patient care.
