Payer, Provider Dialogue Key to Prior Authorization Reform

February 22, 2017 - ORLANDO - Prior authorization reform has recently been a hot topic for many healthcare industry groups and it was no different at HIMSS17.

To find out more about what providers and payers plan on doing to alleviate the administrative and care access challenges related to prior authorizations, RevCycleIntelligence.com sat down with Charles Stellar, President and CEO of the Workgroup for Electronic Data Exchange (WEDI).

Stellar was one of many on a panel discussing prior authorization burdens at HIMSS17. His fellow panelists hailed from various parts of the healthcare system, including payers, vendors, and industry groups, such as the American Medical Association (AMA).

The AMA recently released survey results that showed three-quarters of physicians found prior authorization burdens high or extremely high. Physician practices also send about 37 prior authorizations per physician a week, accounting for an average of 16 hours of staff time.

A recent CAQH report also revealed that many practices may be spending more time on manual prior authorizations. A manual prior authorization took about 20 minutes, whereas an electronic version only took about 6 minutes.

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Even though manual prior authorizations could save provider time, full electronic prior authorization adoption among health plans in 2015 was just 18 percent.

Stellar, the former Executive Vice President of American’s Health Insurance Plans (AHIP), shed some light on how prior authorizations became so burdensome for providers and what is being done to help providers get back to delivering care.

Prior authorizations started as a necessary payer and provider dialogue

The administrative challenges with prior authorizations are certainly not new to providers, Stellar stated. The issues may have even gone back about 40 years.

“When I was first starting in the business, we had all the various components for trying to better manage the patient and a patient’s situation,” he said. “We wanted to look at cost, quality, and outcomes even in the early days. We were kind of profiling physicians to see who seems to be doing a better job than others.”

Providers, however, did not perceive payer utilization management strategies, such as prior authorizations, as a good thing for their patients. Instead, many providers viewed it as a way for payers to catch them making a mistake.

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He added that when prior authorizations were first imposed on providers the requirements for approval were also not clear. As a result, payers and providers were engaging in longer discussions about patient care.

“There was criteria, but it wasn’t as well-defined at that point as it should have been,” he stated. “There was a lot of going back and forth between the provider and the plan, which we felt was the dialogue that was needed so it didn’t become cookbook medicine.”

The extended payer and provider conversations were necessary for understanding prior authorizations and healthcare utilization management.

“A lot of it was intentional for there to be the dialogue and for us not to have these automatic systems in which 85 percent or so are automatically approved,” he said. “This way providers know what questions to ask and what answers to provide so that nothing was kicked out.”

Prior authorizations continue to challenge providers

Despite using prior authorizations to spur better provider and payer communication, Stellar pointed out that providers and patients are starting to view the utilization management tool as a burden.

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“From the provider perspective, the challenges include the time that physicians are spending answering questions on the phone, sending faxes, and trying to pull a portion of the record,” he said. “But some are also complaining of frustration and just sending the whole health record for prior authorization approval.”

On the other side, some payers are become equally frustrated with prior authorization requests that are coming in with too much information. Payer staff may not want the liability of searching through the entire medical record for prior authorization information. They just want to necessary data to send back a decision.”

The essential dialogues that used to take place between payers and providers on prior authorizations seemed to break down.

“There’s no telling providers the criteria for prior authorizations,” Stellar pointed out. “They aren’t being told what the payers plan to measure and what is covered.”

Many providers are also now seeking information on how prior authorizations can be automatically approved for a wider range of patient cases, not just on a case-by-case basis. However, part of the original intent behind prior authorizations was to prevent unnecessary healthcare utilization and better manage individual patient cases.

“Now, we’re administering a thousand variations on benefits,” he elaborated.  “So, one person is slightly different from the next person. It’s not as easy as one would assume it is to make a system that is 90 percent automated.”

“There are also some payers and stakeholders who might say that if plans give providers a criteria for more automated approvals for a majority of patient cases, then some providers may try to game the system,” he continued. “There’s always been a distrust between payers and providers.”

However, payers and providers may need to jumpstart the prior authorization dialogue in a new way to make the utilization management technique work for both parties and ultimately improve care.

“But having said that, I’ve been on the payer side for many years and I’ve worked on this particular issue,” Stellar said. “We should try to  see what we can figure out.”

“While we can’t necessarily say we still believe there should be the dialogue, we don’t believe that it should be harassment. It should never affect the patient. So, let’s see if there is a way to improve processes, business flows, revenue cycles, or whatever the situation is.”

By restarting a dialogue, there is a  major opportunity for prior authorization reform to regain or develop trust between payers and providers.

“We could realize administrative savings in addition to the regained trust between the providers and the payers, which you can’t put a price on,” he said. “But that’s something I think we should definitely be doing.”

In addition to provider and payer collaboration issues, Stellar pointed out that competition between payers has also stymied prior authorization reform.

“We can’t bring all of the payers together and say let’s come up with these guidelines that determine what’s going to be covered because of antitrust,” he stated. “Some payers would say that we should stay out of that when everyone starts talking about coverage. You have some risk of payers not being able to assemble because then it would be getting into pricing.”

“Some payers may also say that they can’t stay in the room and talk about prior authorization reform with another payer because they’re competitors,” he continued. “There’s complexity here, but that still doesn’t mean we can’t do something.”

Getting stakeholders together to forge a prior authorization solution

There may be a light at the end of the tunnel for prior authorization reform, Stellar suggested. Under a new Department of Health and Human Services (HHS) head and through more stakeholder collaboration, such as the HIMSS17 session, payers and providers can revitalize their prior authorization dialogues.

WEDI also developed a work group to address prior authorization reforms for payers and providers.

“One of the things that we did some years ago was develop one of our prior authorization work groups that is co-chaired by the AMA and a payer,” Stellar said. “The parties provide both perspectives.”

“They’ve been looking at it from the business flow of information and the revenue cycles as well as what constitutes an automatic approval,” he added. “The work group also asks if we as an industry have the systems that would allow for a more automated process to work or is it still more manual. Also, what part of prior authorizations can be cleaned up or eliminated to remove the hassle aspect.”

The WEDI work group also addresses what needs to be part of prior authorization dialogues to be meaningful for both stakeholders.

Stellar added that other industry groups have also been actively working to reform prior authorizations. For example, the AMA recently joined 16 other organizations to offer health plans 21 prior authorization reforms. Among the suggestions were ensuring that prior authorization programs are based on clinical validity and not just healthcare cost containment.

The groups also recommended that health plans implement prior authorization programs that support care continuity, boost transparency, enhance timely care access and administrative efficiency, and offer exemptions for providers who demonstrate appropriate resource use.

In the HIMSS17 session, WEDI also announced a new prior authorization group that would bring payers and providers together to discuss reform. Stellar anticipates the new group to be the entity that brings prior authorization comments to the right individuals to spur change.

Additionally, he expects the new HHS Secretary, Tom Price, to motivate prior authorization reform.

“With the new secretary and WEDI being an advisor, we’re hoping that the leadership change acts as a reminder to HHS how helpful we can be,” he said. “Like how we can help to improve the information flow and encourage more prior authorization research ASAP.”

“The bottom line is we have a new opportunity with the new Secretary,” he continued. “We can help with the elimination of unnecessary regulation wherever that may be and help to get unique identifiers in a way they we don’t have to recreate the world to get it. Is there anything existing that we could we can use to improve prior authorizations?”

He emphasized how prior authorization reform through WEDI and many other industry groups is about simplifying the process for all stakeholders while ensuring that patient care is never compromised.