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Automated Prior Authorization 2023
What Impact Do Automated Prior Authorization Solutions Provide?
Author
Dustin Cragun
Author
Alex McIntosh
Author
Tyler Sycamore
Prior authorization is mandated by payers to ensure that certain clinical procedures and medications being ordered are necessary. To alleviate the heavy administrative burden this requirement causes, healthcare organizations have adopted automated prior authorization solutions. For this report, KLAS interviewed 30 respondents from 26 unique organizations to understand their experiences using these solutions and what outcomes they have seen.
Automated prior authorization is an emerging market, and KLAS has not yet validated enough customers to share performance data for all vendors. In this study, we spoke with provider organizations using the vendors listed below. Going forward, KLAS intends to measure the following vendors and others as adoption grows:
- CenterX
- Change Healthcare
- Cohere Health
- Infinx
- Olive
- Rhyme
Automated Prior Authorization Improves Financial Performance and Staff Efficiency
Nearly all interviewed organizations have seen improved financial outcomes and/or staff efficiency from using automated prior authorization. For the 78% of respondents who report improved financial performance, key outcomes include a more efficient, streamlined authorization process; decreased time to approval (within 24 hours); and fewer denials being sent back to provider organizations. While no respondents feel their financial performance has worsened, the remaining 22% have seen no impact and have not achieved outcomes, citing authorizations being returned, not all cases being processed, and the vendor and payer failing to work together to get authorizations approved. Some respondents have also not seen financial outcomes because they haven’t fully implemented their product, preventing them from reaping the full benefits.
“We have improved in terms of our ROI calculations and our spending on employees. We have done some work with denials and improved in that area as well. The system has had a positive impact. It is just bloody to get there.” —VP
Increased staff efficiency and reduced staffing needs are also major benefits of automated prior authorization, reported by 78% of interviewed customers. Respondents say streamlined workflows allow them to process more authorizations with the same number of FTEs or to reduce the staffing burden for prior authorization, thus improving ROI. A couple of respondents feel staff efficiency has worsened; they cite poor implementations and the time it takes to get the system up and running.
“The implementation for the claims status piece took longer than we expected, but we were able to save about 15 FTEs for claims statuses, and that was great. My boss speaks highly of that project, and we kicked off many other projects with [our vendor] because that project produced what we thought it would.” —Director
Expansive Use of Automated Prior Authorization Leads to Higher Satisfaction
Over half of interviewed provider organizations are using their prior authorization solution for more than 10 payers; of these organizations, two-thirds report their solution works with more than 75% of their associated payers. This expansive use has led to these organizations (which tend to be larger in size) having a higher degree of satisfaction compared to those using their solution for 10 or fewer payers. Respondents who use their solution for more than 10 payers are more likely to be satisfied with ease of use and highlight simplified, streamlined workflows and the ability to process authorizations without hiring additional FTEs. Most in this group would buy their solution again; in contrast, only 50% of respondents using their solution for 10 or fewer payers would do the same. While prior authorization solutions can work with a large portion of provider organizations’ payers, most respondents note their solution does not yet work with all their payers and hope to see a continued increase in the number of payers their vendors work with.
“Vendors are often contracted with specific payers. There are limitations around which vendor we can get prescription estimate information from, and that is why healthcare systems implement multiple vendors. But [our vendor] hasn’t had any issues with that beyond a couple of things. The only gaps have been the carve outs as well as the people who don’t participate in electronic processes. One payer doesn’t share their PBM information with any EMR. So with [our vendor], we are doing an extra build and trying to capture those additional patients.” —Analyst
Customers Want Further Streamlined Workflows, Are Hopeful for Future Improvement
Interviewed customers—even those highly satisfied with their solution—report automated prior authorization could be improved. Some feel their product is clunky and difficult to use; workflows can be hard to set up and cause issues if done incorrectly, and customers want more streamlined workflows to help them achieve more tangible benefits. Implementation times are longer than expected for many organizations, who cite having to go through a challenging process before seeing any benefits. Others note that integration issues (particularly with EMRs) can complicate the implementation process. Customers would benefit from their vendor setting clearer expectations up front about the difficulties associated with moving to a prior authorization solution.
No product’s functionality meets all customers’ needs; across the board, the lowest-scoring metrics for prior authorization solutions are product related. However, many respondents believe in the technology and feel their vendor is moving in the right direction. Some interviewed organizations are expanding or planning to expand their product usage and hope this will improve product performance. Provider organizations appreciate that their vendor can work closely with payers to gather and share the medical criteria necessary for submitting authorizations and also to stay updated on continually changing requirements. Provider organizations that struggle to access medical criteria cite payers’ unwillingness to work with their vendor to provide the necessary information or the vendor’s internal lack of knowledge about guidelines.
“It has taken us significantly longer to see results than we were led to believe that it would. Everything that we have done so far has been very time-consuming. It has taken a lot of time for my staff members to work with the vendor’s people to get the EHR to work. That process has taken a lot of patience, and we still aren’t very far. Had we known that it was going to take as long to develop as it has, we wouldn’t have bought it. The system is progressing, though, and it has a lot of potential.” —Director
“The product’s functionality doesn’t meet all of our needs today, but it is moving in the right direction. [Our vendor] understands and is doing better today than they did even 24 months ago when this first became a discussion. The vendor is moving in the right direction and is bringing on resources who are not necessarily technology experts but have some background on the provider side. That is helping.” —VP
Some Friction between Prior Authorization Vendors & Payers; Most Provider Organizations See No Change in Their Payer Relationships from Prior Authorization Solutions
Regarding payer-provider relationships, some interviewed organizations mention that payers can be frustrated with prior authorization vendors due to large automated-transmission volumes or be resistant to provider organizations using prior authorization solutions. Some payers even block vendors’ solutions from accessing necessary information. Despite this frustration, 85% of respondents feel their payer relationships have remained the same and say the friction is largely between vendors and payers. 15% of respondents even report that using automated prior authorization has improved their payer relationships. A few worry about potential issues resulting from the vendor-payer conflict—if a payer chooses to no longer work with a particular prior authorization vendor, the organization then loses access to that payer, undermining the difficult implementation process the organization went through for the prior authorization solution.
“When we were starting with the product, we were sensitive about the impact it would have on our relationship with our payers. But I haven’t seen any big impacts there. I haven’t really felt like there have been any negatives. We have all of these users who are not necessarily bombarding those websites. But I do know that the initial concern was that we were flooding the website with bot interactions rather than user interactions. But I have not heard that that has been an issue from the payer perspective since we have gotten into the system.” —Director
About This Report
This report is a perception study designed to help readers understand where the automated prior authorization market is and what outcomes organizations using automated prior authorization are seeing. To gather these perspectives, KLAS spoke to 30 healthcare leaders from business office and ambulatory practice administration areas within 26 unique organizations. Interviews were conducted from December 2021 to October 2022.
The questions asked in the evaluation for this report are as follows:
- How well does your vendor provide the necessary medical criteria guidelines needed to submit prior authorizations for approval?
- What impact has your prior authorization product had on your organization’s financial performance?
- How well does your product correctly guide workflows for all prior authorization procedure types?
- What impact has your prior authorization product had on staff efficiency?
- What impact has your prior authorization product had on your relationship with your payers?
Sample Sizes
Sample sizes displayed throughout this report represent the total number of individual respondents interviewed for a given question. Some respondents choose not to answer particular questions, meaning the sample size can change from question to question. When the number of individual respondents for a particular question is less than 15, the score for that question is marked with an asterisk (*) or otherwise designated as “limited data.” If the sample size is less than 6, no score is shown.
Writer
Natalie Hopkins
Designer
Bronson Allgood
Project Manager
Ethan Lui
This material is copyrighted. Any organization gaining unauthorized access to this report will be liable to compensate KLAS for the full retail price. Please see the KLAS DATA USE POLICY for information regarding use of this report. © 2025 KLAS Research, LLC. All Rights Reserved. NOTE: Performance scores may change significantly when including newly interviewed provider organizations, especially when added to a smaller sample size like in emerging markets with a small number of live clients. The findings presented are not meant to be conclusive data for an entire client base.