6 Challenges of End-to-End Automation for Prior Authorizations

August 20, 2019 - Only 12 percent of the 182 million medical sector prior authorization transactions were fully electronic in 2018, making prior authorizations one of the most manual transactions compared to other federally mandated HIPAA electronic transactions, according to the 2018 CAQH Index.

Providers are still primarily using phones, faxes, and emails to manage the prior authorization process, resulting in increased administrative burden, care delays, and even serious adverse events, according to physicians in a recent American Medical Association survey.

Payers and providers alike agree that automation is the key to reducing the burden of prior authorizations. So, why is the prior authorization process still predominantly manual?

In a new white paper, CAQH identifies the top challenges preventing the industry from automating the prior authorization process from end-to-end. The challenges include the need for data consistency, lack of standards for attachments, limited integration between clinical and administration systems, lack of vendor products, state requirements for manual intervention, and limited provider awareness.

Industry needs data consistency

Payers are inconsistent with how codes are used to communicate prior authorization status, errors, and next steps, including the need for clinical documentation to prove medical necessity, which is a major barrier to end-to-end automation, CAQH reports.

READ MORE: How Advocate Aurora Health Streamlined Prior Authorizations

“In a landscape where requirements for authorizations differ across (and within) health plans, providers do not have an efficient way to identify what critical information to submit in the request. Lack of uniformity in code use – and use of overly generic codes that do not provide clear direction and next steps – further limit adoption of the standard transaction on the provider side,” the council states in the white paper.

Major industry stakeholders have been calling for increased transparency and administrative efficiency when it comes to prior authorizations.

In 2018, six industry groups representing providers, payers, and pharmacists urged stakeholders to promote transparency and accessibility of prior authorization requirements, criteria, rationale, and process changes.

With more transparency, the groups, which included the AMA, America’s Health Insurance Plans (AHIP), and the American Hospital Association (AHA), hope to make the process easier for all involved.

No mandated standard for attachments, clinical documentation

Clinical documentation and other attachments explaining a patient’s clinical position help health plans determine medical necessity and appropriateness. But a lack of an attachment standard or uniformity across plans not only confuses providers, but also the industry at large, CAQH explains.

READ MORE: 3 Strategies to Minimize the Burden of Prior Authorizations

Vendors find it difficult to create solutions that support HIPAA’s electronic standard for prior authorizations (5010X217 278 Request and Response) when health plans require different levels of clinical documentation detail on prior authorization requests, the council states.

Lack of clinical and administrative system integration

Interoperability has been a major healthcare challenge. Data from the ONC even recently showed that interoperability improvements stagnated between 2015 and 2017 among office-based physicians.

The situation is similar among providers and other stakeholders seeking relief from prior authorization burdens. CAQH reports that the lack of integration between administrative systems that initiate prior authorization requests (e.g., practice management systems) and clinical systems containing supporting evidence (e.g., EHRs) creates a barrier to end-to-end automation.

“Because integration between PMS and EHR systems is uncommon, most providers must retrieve clinical information from the EHR and manually enter it into the prior authorization request. This process can be not only an obvious source of human error, but also a frustrating drain on productivity and efficiency,” the white paper states.

This represents an opportunity for EHR vendors, the Workgroup for Electronic Data Interchange (WEDI) recently stated.

READ MORE: AMA: Health Payers Lagging with Prior Authorization Reform

The group found that EHR systems need an automated prior authorization workflow that uses data standards like X12, HL7, and FHIR to develop a “single action order entry,” in which providers submit prior authorization requests through the EHR during a patient encounter and the system triggers a workflow that automatically connects providers with payers to determine if a prior authorization is required and what documentation is needed.

Limited solutions that support the standard transaction

Providers have little opportunity to purchase vendor solutions that can automate the prior authorization from end-to-end, CAQH finds.

In the 2017 CAQH Index, the council found that very few vendor solutions had the ability to support electronic prior authorizations. Only 12 percent of products could handle electronic prior authorization compared to 74 to 91 percent for all other electronic transactions analyzed.

Some vendors also reported to CAQH that their solutions do support electronic prior authorizations, but the functionality is “not part of the core product offering to providers,” meaning providers would need to pay more to enable the capability.

Some states require manual intervention

Some states require parts of the prior authorization process to remain manual, CAQH reports. For example, health plans in Minnesota must contact providers via phone, fax, or secure email when a prior authorization request is not certified.

Colorado and Rhode Island both require health plans to give providers the opportunity to speak with a qualified medical professional either on the phone or in person before issuing an adverse prior authorization determination, CAQH explains.

The state laws are meant to ensure patients with more complex prior authorization requests receive the most appropriate, timely care from their providers and health plans. However, the states keep the process rooted in the manual world, creating burdens for both providers and payers.

Additionally, having to abide by manual prior authorization laws in some states but not others creates unique challenges for health systems and plans that operate across the country, CAQH points out.

Lack of provider awareness

Limited provider awareness that HIPAA requires health plans to offer the 5010X217 278 Request and Response for prior authorizations is preventing the industry from adopting electronic transactions on a wider scale, CAQH argues.

“Greater demand from providers can incent broader use of the 5010X217 278 Request and Response and encourage development of vendor products to support its exchange,” the council states.

With the top challenges identified, CAQH hopes stakeholders will act in a more collaborative fashion to develop and adopt an electronic standard for prior authorizations.

“Each standards and operating rule development organization holds a piece needed to complete the puzzle and to collectively integrate clinical and administrative data. Recognizing the meaningful opportunity to optimize the prior authorization process, these organizations are working more closely than ever before. Emerging initiatives are focusing on the interplay of standards and operating rules to close automation gaps,” the council writes.