Preauthorization. Precertification. Prior authorization. One of the most time-consuming, costly, and complex paperchase processes for the healthcare industry goes by many names.
The delays to patient care, combined with the authorization acrobatics healthcare providers are expected to perform, continues to create unprecedented and frustratingly high costs. In the uphill battle against insurance “Goliaths,” some health systems have the scale to send a message. Fourteen major hospital systems refused to participate in Medicare Advantage’s red tape rodeo by opting out of being in-network this year. However, ASCs have limited resources; our industry is like a modern-day showdown between David and Goliath where the little guy rarely wins. While our industry waits for the CMS Prior Authorization Rule to take effect in 2026, there are proactive ways to improve David’s probability of success today.
The Basics: Utilize Technology to Your Advantage
Knowing what we’re up against, there’s no question that advocating for a patient takes patience and dedication, but it also takes a great deal of planning, including planning for the unexpected. The most common payer denial strategies are based on surgical outcomes you couldn’t have anticipated.
Creating a database of procedures that require prior approval by payer, including what documents are necessary, and a range of CPT codes for each procedure is the first step in building your prior auth approval strategy. Payers are hedging their denial reasons on your inability to see into the future, but you can outsmart them with this approach.
For instance, with CPT 29827 (Arthroscopy Shoulder Rotator Cuff Repair), the extent of damage or necessary procedures may not be clear until surgery begins, even with prior imaging. Review your case history to see what additional codes or what range of codes you should include in your pre-approval process. Unexpected CPT codes and modifiers that were necessary but increased the cost of the surgery are easy to deny. Don’t give them the satisfaction.
Once you have this information, you’ll need to organize it in such a way that it’s easy to access and template. Payers often ask for medical records to prove medical necessity, so our standard practice is to provide all relevant records, including history and physical examinations (H&Ps), operative notes, pathology reports, office visit/progress notes, and imaging records.
Chart management software and cloud-based storage can help streamline the prior auth process by organizing patient files and preparing documents for electronic submission. Automation can also help flag any missing documents or discrepancies within patient files to ensure accuracy. Always verify insurance eligibility and review patient demographics with your patient before submitting them.
Analyzing Payer-Specific Authorization Patterns
The next step is to rely on aggregated data to learn the habits and patterns for each of your payers’ prior authorization process.
Track the outcomes of your payer interactions to determine:
- Which procedures take the longest to receive prior authorizations
- Which procedures get the most pushback and request for additional documentation
- Which procedures tend to require peer-to-peer review
For example, if you determine cases with a certain type of implant give you the most hassle, you can review your successes and create templates for each scenario to respond faster.
Business intelligence tools that pull data points in meaningful ways will elevate your ability to not just track responses but predict them. You’ll also be able to track if payer behavior deviates from historical outcomes.
Use Your Data to Track Patient Outcomes and Costs
Tracking patient outcomes is paramount for value-based care models and contract negotiations. ASCs typically compare their outcomes and costs with in-patient facilities. However, you can also track the outcomes and costs for patients with prior authorization delays and denials and compare to patients who received immediate approval for the same procedure.
Prior authorization delays or denials can worsen a patient’s condition, resulting in a trip to the emergency room, a more complicated and expensive procedure, a riskier surgical outcome, or a longer recovery time. These unnecessary delays typically increase the expenses and the estimated cost of your initial treatment plan.
While leveraging this data during the prior authorization process might not persuade a major payer to approve a procedure, it could be of use during negotiations with smaller, local employer plans that are interested in cost savings that deliver quick recovery times for their employees.
Data that speaks to the cost of prior authorizations and the negative impact on patient well-being can also be useful to patients who may rely on this information to bring class action lawsuits against insurance carriers. UnitedHealthcare, Cigna, and Humana are currently facing lawsuits for denials. These patients and their families have a fighting chance against their (and our) Goliaths, thanks to the litigious mountain of paperwork acquired from their healthcare providers.
Lastly, tracking prior authorization outcomes can be helpful in determining all costs associated with each procedure and each payer. Track the time it takes to receive each prior authorization, then apply staff and physician salary to that time. Add this amount to all other expenses associated with a case to give you the true cost of each case by payer. Then compare that cost to the payer’s reimbursement to understand your margins. This analysis may also come in handy when determining your pricing structure and renegotiating contract terms.
Artificial Intelligence and Prior Authorization: Challenges and Opportunities
When the Centers for Medicare & Medicaid Services (CMS) issued directives urging insurance providers to streamline prior authorization procedures through automation and quicker decision-making, the aim was to enhance patient access to care. However, the insurance industry's adoption of artificial intelligence (AI) to expedite prior authorizations has led to a concerning surge in denials, impeding patient access to care. We have yet to see if payers will continue to incorporate AI to meet the CMS Prior Authorization Rule requirements, such as sending decisions for urgent cases within 72 hours.
Although Cigna and UnitedHealthcare announced the elimination of 20-25% of prior authorizations for non-urgent medical services and procedures in 2023, this move came after legal actions were taken against the companies for their use of AI-driven authorization tactics. Humana, the latest Medicare Advantage payer embroiled in an AI-related class action lawsuit, faces criticism for cutting payments related to rehabilitation care for beneficiaries. UnitedHealthcare confronts similar accusations from the families of two deceased Medicare Advantage patients who died after being denied coverage for essential post-acute care, and Cigna is under scrutiny for relying on AI technology to reject hundreds of thousands of claims without physicians opening or reviewing patient files.
There’s more technology and science behind revenue cycle management now than ever before, and the results from pending class action lawsuits could determine the role of AI in prior authorizations and claim denials for years to come. While we wait for the impact of these lawsuits a combination of machine learning, AI, and human intervention can enable templated, logical rebuttals and automated responses to help address these challenges. When we predict what a payer’s response will be, we can prepare for all possible outcomes ahead of time.
David’s Next Move Against Goliath on the Authorization Battlefield
Prior authorizations were meant to prove medical necessity, to serve as a checks and balances system, and to ensure doctors are ethically prescribing the right treatment so patients aren’t charged for unnecessary procedures. Essentially, prior auths were meant to deter healthcare fraud. However, there isn’t one statistic that shows increases in prior authorizations can decrease medical fraud. In fact, one could argue that prior authorizations are linked to insurance fraud and caused by the very corporations tasked as the watchdogs.
The facts are simple, yet the situation continues to deteriorate our nation’s healthcare: prior authorizations don’t decrease the cost of healthcare or improve it. We know this because the cost of healthcare continues to rise, and patients are suffering needlessly due to delayed access to treatment. The thin line between profit and loss is a national concern for America’s healthcare facilities; meanwhile, the health insurance industry’s billions in revenue are generated from our struggle.
In the larger landscape, while patients advocate for their rights in the courts, payers might start acknowledging that approving patient procedures could potentially cost them less than the financial burden of facing and losing multiple lawsuits.
In the meantime, as we wait for the CMS Prior Authorization Rule to play out in the years ahead, nimble is closely monitoring initiatives aimed to streamline the prior authorization process, including UnitedHealthcare’s national Gold Card Program. This initiative is slated for 2024 implementation across UnitedHealthcare’s commercial, Medicare Advantage, and Medicaid platforms to pre-approve qualified members for most procedure codes. We’re curious to see if other carriers adopt similar programs, as well as the percentage of beneficiaries deemed eligible (and what the eligibility requirements are), and we’ll continue to adjust our strategy and inform you of our progress.
In the pursuit of a more efficient and patient-centered healthcare system, nimble stands at the forefront, ready to meet the evolving needs of our clients to meet payer challenges head-on.
Visit nimble solutions during Becker’s 29th Spine, Orthopedic and Pain Management-Driven ASC + The Future of Spine Conference on June 19 – 22, 2024 in Chicago for additional revenue cycle management solutions. Go to nimblercm.com to learn more.