Prior Authorization: Discovering the Technology Potential

Posted by Everest Group on January 8th, 2024
Everest Group
Everest Group are a Dallas headquartered research firm focused on global services markets such as IT services, business process services, and engineering services. They also leverage their research and advisory expertise to assist firms in areas such as GTM strategy, M&A support, and thought leadership.

Prior authorization requirements are important to smart medical cost and patient care management. Yet, the current processes can be burdensome and complex. Learn how electronic prior authorization and automation technologies can help insurers overcome prior authorization challenges and enhance the member experience in this blog.  

Smart Data Solutions, in collaboration with Everest Group, had an insightful discussion on discovering the technology potential of prior authorization. Watch the LinkedIn Live session here.

Prior authorization, the process healthcare providers follow to obtain payer approval before providing certain medical services or medications to a patient, is rapidly undergoing digital transformation. Ongoing industry efforts aim to streamline and improve prior authorization, balancing the need for controlling cost and reducing healthcare provider administrative complexity. Let’s explore this further.

Prior Authorization: Discovering the Technology Potential 1

Existing process complexities driving the need for electronic prior authorizations

The rising importance of technology in prior authorization can be attributed to its increasing prominence in controlling cost, preventing unnecessary services, detecting fraud, preventing abuse, and managing specialty medications among other key benefits.

Prior authorization denials, appeals, and re-submissions, along with the time spent on documenting and processing the medical necessity, add to healthcare payers’ and providers’ overall costs as patients shift to other emergency services. Moreover, prior authorization also increases the growing gap among physicians in providing timely care. The graphic below captures results from a recent survey about prior authorization challenges.

Prior Authorization: Discovering the Technology Potential 1

Increased patient volume has amplified the need for electronic prior authorization. The current processes involve many complexities such as:

Broadly, the challenges payers face can be categorized into three major steps involved in prior authorization: intake, review, and communications, as illustrated below:

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Key trends shaping the industry

Addressing these prior authorization challenges requires a technological solution that enables collaboration between payers and providers. The industry is being shaped by the following key trends which aim to eliminate manual processes and introduce automation and interoperability into the system:

The role of technology in the ecosystem

As payers move towards enhancing member experience, technology has risen to the forefront of the conversation. CMS has started working on changing rules for government-sponsored healthcare plans “to improve the electronic exchange of healthcare data, and streamline processes related to prior authorization.”

Technology can play a pivotal role in the various stages of the prior authorization lifecycle:

Additional requirements include using AI and natural language processing (NLP) technologies to extract data from electronic health records (EHRs) and enhance the patient and member experience.

Gokul Janardhan, Senior Analyst, Everest Group
Priya Sahni, Practice Director, Everest Group
We are sharing this blog from leading research firm Everest Group guest bloggers Gokul Janardhan and Priya Sahni.

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