The Promise of Automated Prior Authorization

Meeting ever-increasing and frequently-changing prior authorization requirements is a pronounced challenge for healthcare organizations and their vendors at this point in time. The widely publicized staffing shortages only add to the burden on healthcare providers and their front office staff. The prior authorization process is very complex and prone to error because things go through multiple human touchpoints at various intervals of time. As a result, providers are trying to figure out how to automate the process to improve accuracy, decrease denials, and provide relief to staff.

Prior authorization promises to be low-hanging fruit when it comes to automation. As the market has picked up energy and more vendors have attempted to solve the problem, KLAS frequently has gotten asked about automated prior authorization solutions. Our recent Automated Prior Authorization report is a provider-perception report of this emerging market.

The Impact of Prior Authorization Solutions

Generally, automated prior authorization has a big ROI in terms of employee satisfaction, better accuracy, and better payment.

Regardless of a vendor’s KLAS score, no organizations saw a negative impact on their financial performance. In the worst-case scenario, providers were seeing no change in financial performance. That means there wasn't really a negative effect on financial performance for most of the providers. No matter the vendor relationship, almost every solution has positively impacted the organization financially. In the end, organizations have an almost 80% chance of seeing an improved financial impact.

While we did see a few organizations with worsened efficiency, 78% did see improvement. Where staff efficiency has either worsened or not changed, it is because organizations have not yet been able to reduce their FTE headcount as initially expected. Providers most often reassign employees to more advanced or financially impactful tasks.

What Providers Should Know

On the surface, implementing an automated prior authorization solution seems like it would be simple. However, many other factors come into play; among them are the differing requirements and data standards of the many different health plans.

Our research revealed that many organizations underestimated the involvement and effort required to implement electronic prior authorization solutions. The rewards and outcomes of implementing those solutions can be readily recognized, but getting there can require a heavy lift.

Many providers say they have seen improved performance, but they also say it can be challenging to get from point A to point B. If your organization is considering automating prior authorization, you will need to be prepared to actively engage in the implementation process.

The Future of Electronic Prior Authorization

We anticipate this rapidly expanding market to continue to attract vendors with new solutions. The demand for electronic solutions is high, and there is ample opportunity for vendors to expand. The federal government is focused on streamlining data and processes to ease the prior authorization burden for providers. That focus will continue to accelerate solution adoption among providers and improve prior authorization results.

All our current data points related to this technology are only improving as time goes on. The future is bright, and now is the time to figure out how to automate your prior authorization process to stay ahead of the curve.

KLAS Plans and a Summit

We will continue to monitor this space as we anticipate that automated prior authorization will remain a high-energy topic in the coming years. We recommend reading this first report to get an idea of what is happening in the market as it is more of a perception study. Our next report on this market will likely include vendor-specific performance data.

Also of note, in August of this year, KLAS will be holding a revenue cycle summit where attendees will discuss and focus on best practices surrounding automation in healthcare.

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