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A Mutual Burden for Providers and Payers and How Interoperability Can Facilitate Change

Author:  Nikki Henck

Prior Authorization Series: Part 2 of 6

From Burden to Benefit: How Interoperability Can Change the Way We Look at Prior Authorization

The debate around prior authorization (PA) and its practicality in providing value-based services often divides Payers and Providers. On the healthcare Provider side of the equation, PAs present an administrative and financial burden for their practices as well as delayed or, in some cases, denied care for their patients. On the other side of the debate sits the Payers, who insist that despite its shortcomings, the PA programs reduce waste and promote quality and safety. 

Simply put, the debate around PA as a healthcare hurdle is unlikely to result in its removal.

Nonetheless, PA presents a very real and ongoing burden for both Payers and Providers. Relying heavily on outdated technology that places tremendous pressure–both administratively and financially–on care Providers and Payers means not only additional unnecessary costs for these parties, but also makes providing timely medical intervention more challenging and can result in negative health outcomes for patients. 

FHIR-based interoperability has the potential to drastically reduce the burden of PA on Payers and Providers, to offer more efficient, appropriate and timely authorizations, more seamless sharing of information and, ultimately, better outcomes for both patients and the wider healthcare sector. 

All Work, No Play: The Current Burdens of Prior Authorization 

Many physician practices spend over 16 hours per week completing PAs. In fact, some practices dedicate a full-time staff member to this process due to the sheer volume of work involved. The manual PA process involves phone calls,faxes, strict deadlines and a great deal of following up with Payers to provide additional information needed for a certification. 

The challenges of PA are further complicated by the different processes and requirements of Payers. As each Payer has unique PA rules and clinical care guidelines that must be adhered to before a request can be certified, an additional burden is placed on the Provider, who must understand the policies employed by each Payer, albeit some Payers may post their policies online. 

Faxes and phone calls are still the most frequently used protocol for relaying information for PA requests, which is time-consuming and means potential for missed deadlines. Jessica, a nurse working at an endocrinology unit in Pennsylvania puts this into perspective for us: 

“I have no way of tracking the status of my prior authorizations, so I keep a notebook next to me with notes of all my PAs, communications, status and follow-ups. I support 15 endocrinologists and I am unable to follow up with patients directly and can only respond when they call me,” she explains. “My job is completely dedicated to PAs. I spend all day submitting and following up with PA requests.”  

Deadlines from Payers of 12 hours for additional information are not uncommon and should a practice miss this deadline— the request is denied due to insufficient evidence. At this stage, the practice can appeal the denial (also called a non-certification), but this process can take between two and 30 days to complete, depending on the Payer’s rules and internal processes.

At this part of the process, Payers’ turnaround times and rules can vary greatly, placing a further burden on the Provider to navigate and understand the process and communicate this with their patients. 

“I feel like my faxes go into a black hole,” Jessica tells us. “I don’t know what happens to them when I send them off to a Payer. Requests for additional information can come through fax with a fast turnaround time like 12 hours. I fear missing a fax which results in a denial and means I would then need to submit an appeal, and that takes more time.”

The COVID-19 pandemic and dispersed workforces have created additional complications for the PA process, as Jessica describes:

“Because I work from home, I rely on my colleague to send me the fax as I have no way of getting faxes from my house. Calling the Payer to respond to a request for additional information can result in waiting on the phone for half an hour.”

What's more, ambiguity around supporting documentation causes PA determination delays.  

As most Payers do not use a standardized form that clearly specifies the type of information needed at presentation, the practice must then submit what they speculate is needed. This often results in the Payer requesting additional information, thus delaying the time of final decision, delaying care and increasing the load on practice staff. 

The Need for a Standard Approach to Medical Necessity Reviews

In a recent AHIP survey, Payers reported the primary objectives of their PA programs to be: 

  • Improving quality and promoting evidence-based care;
  • Protecting patient safety; 
  • Addressing areas prone to misuse; 
  • Reducing unnecessary spending. 

The vast majority of these programs result in (according to Payers) increased quality of care, greater affordability and better safety for patients. However, achieving these outcomes is not without its challenges. 

The Payers’ review processes are as cumbersome and inefficient as that faced by Providers. The process of PA for Payers includes both an administrative review and a medical necessity review. The administrative review centers on patient eligibility, benefit coverage and Provider network participation (or lack thereof).

The second part is the medical necessity review in which a nurse must review the requested service and supporting clinical documentation to determine whether a service is medically necessary. This is an onerous and complicated process that requires a nurse to pour over a scanned document (which can be sometimes over 100 pages in length) to assess the patient’s diagnosis, condition, complaints and medical history in order to match these to clinical care guidelines for the service being requested. 

Because most Payers do not use standardized forms to collect this information, nurses must review all information submitted, which takes considerable time. A further challenge is presented in that each health plan has a unique approach to determining medical necessity. This can include when to apply proprietary business rules, medical policy, evidence-based criteria and NCD or LCD (national or local coverage determinations) guidelines. 

Tell Me More: The Challenges of Dealing with Insufficient Information While Managing Prior Authorization 

According to the AHIP survey, in 86% of non-certified cases, an initial denial of coverage decision is made due to incomplete or insufficient information from Providers. Insufficient information makes it difficult for Payers to make a determination within the required turnaround time and impacts the contractual service level agreements and compliance standards. 

In most cases, a lack of information results not only in negative outcomes for the patient and practice involved, but also an administrative burden on Payers, who must spend more time reaching out to Providers for information. This stops and starts the process and extends the ultimate time to decision. Finally, upon a denial, when the Provider appeals the decision, the Payer must reconsider the decision, which at times can involve fair hearings.

The lack of standardized forms to collect data needed for review places added burden on Payers’ nurses to find the relevant information for decision-making from sometimes huge quantities of often disorganized information. These challenges impact decision timeliness and mean that PA turnaround times can vary considerably depending on the type of service being reviewed; putting further pressure on nurses to develop their own individual best practices to ensure they complete reviews in a timely manner. 

Elevating the Prior Authorization Process with Interoperability

Encouragingly, over 84% of Payers surveyed reported that automation is the single greatest opportunity for the sector to reduce the burden of PA. The use of technology and an improvement in the processes for submitting PA requests are the areas most ripe for harmonization, according to the AHIP survey. 

With this potential for reducing the burden of PA in mind, the CMS proposed the  Interoperability and Prior Authorization rule. While it is on administrative hold, the rule requires Payers to utilize APIs that offer Providers more streamlined access to data. 

Once interoperability is established, Providers are able to send their PA requests electronically (rather than by fax) and include the necessary information for a timely decision turnaround time. It also means that Payers can express their requirements and respond in a timelier manner thanks to electronic inquiries and submissions, as well as receive the information they need for adjudication in a standardized, streamlined and easily transmittable format. 

Smile for Positive Change 

Of course, one of the greatest concerns for both Providers and Payers is that they will need to build and implement new systems to realize this healthcare transformation, which can be costly. However, Smile and FHIR solve that dilemma. The two key tenets of FHIR – data persistence and FHIR enabling – allow Providers and Payers to communicate and share data without the need to rip and replace the systems they currently use. 

Compounding the burden of PA in its current state are multiple datasets, disjointed sources of data truth, inconsistent formats between Payers and Providers, siloed information, and the exponential growth of data. Interoperability is the solution to these issues and it’s no wonder that both Payers and Providers are overwhelmingly in support of the move toward this transformation. 

FHIR supports legacy health platforms and applications, as it can be expressed as XML, JSON or RDF.  This is especially important to Payers, as legacy systems can cost millions to replace. What makes FHIR powerful is that an organization’s implementation of FHIR need not support all FHIR resources, but must instead only support those the organization has a use for. The FHIR standard doesn’t bring a system into or out of HIPAA compliance, but instead, can be implemented in HIPAA-compliant networks. 

Smile facilitates interoperability between disparate systems through FHIR enabling, data persistence and FHIR APIs. Our approach means being able to scale up or down, to suit the needs of the organization. Smile solutions are built to be interoperable at every level, to break down data silos, allow for ML and AI in healthcare and retain important elements of existing systems, whilst maintaining the ability to monitor, audit and authorize data. 

For PA, Smile’s expertise in data persistence, FHIR enabling and FHIR APIs facilitates interoperability to support real-time decisioning and faster, more accurate medical necessity determinations; effectively reducing the burden of PA on the sector will ensure quality of care, safety and appropriate utilization.

To continue learning about the Prior Authorization Series, read our blogs:

Part 1: Why the CMS Prior Authorization Rule Is a Win for Providers and Payers
Part 2: A Mutual Burden for Providers and Payers and How Interoperability Can Facilitate Change
Part 3: (Coming soon)