Strategies to Reduce Prior Authorization Errors
Do you know what your prior authorization error rate is or the financial impact it has on your overall revenue? During a Becker’s Hospital Review webinar, National Medical’s President Lisa Rock explains why accuracy within front-end operations is critical for the financial success of surgery centers. In one example, Lisa highlights the significant revenue loss that can stem from a two percent error rate in the authorization process.
View the full webinar (1 hour) The Business of Powering Profitability: 5 Overlooked RCM Processes ASCs Must Review Before the End of the Year for Financial Success
As Lisa notes during the webinar, prior authorization errors are just one aspect of front-end operations that can have a direct impact on annual revenue, but there’s also hidden costs within the prior authorization approval process that can affect your bottom line in real-time. For example, have you ever measured the cost associated with prior authorizations by calculating the time it takes to receive approval and the salary of the staff members working each request? One health system with more than 80 outpatient sites recently estimated that in 2019, the negative financial impact of managing prior authorizations cost roughly $18.2 million, with $3.6 million attributed to lost revenue due to cancellations and rescheduling stemming from prior authorization delays. According to 2021 survey results from the American Medical Association (AMA), on average:
- Physicians and their staff spend almost two business days (13 hours per week) completing prior authorizations;
- Most practices are waiting three business days or more to receive prior authorization decisions from payers;
- Two in five (or 40 percent) of physicians have staff who work exclusively on prior authorization requests;
- Most practices complete 41 prior authorizations per physician per week;
- The preauthorization process consumes at least 20 hours of staff time per week, including physician time, nursing time and clerical hours (nearly 853 hours per year).
Although prior authorization is an unavoidable step for many patients, the current process is often manual and can be one of the most time-consuming aspects of an administrator’s day. According to the AMA, 88 percent of physicians find the administrative burden associated with prior authorization to be high or extremely high; the turnaround time associated with prior authorization can also be a major hurdle in accessing necessary care, which ultimately affects patient wellbeing, patient satisfaction, and the overall patient experience. As a result, healthcare providers have been pushing for prior authorization reform, and in 2022 there have been several updates to cut red tape and minimize prior authorization legwork. Facilities are also embracing technology and digital solutions, including electronic prior authorization software and cloud-based, automatic prior authorization tools.
During the webinar, Lisa explains how automation can be a solution for surgery centers to overcome prior-authorization roadblocks and recapture revenue that is otherwise delayed or lost due to human error, changes in payer rules, inexperienced staff members, and time constraints. She outlines how automation can save time and reduce the costs associated with relying on clinical staff to obtain prior authorizations. She also presents best practices for tackling additional issues within the revenue cycle to recoup reimbursements faster. If your facility is considering a strategy to minimize prior authorization errors and streamline the prior authorization process, Lisa suggests beginning by asking five front-end operations questions:
- How are incoming surgery requests received; what is the timeframe for receiving and providing information?
- What is the best way to automate the process?
- Who is responsible for obtaining prior authorizations?
- How do you train front-desk staff on payer and regulatory updates?
- Are there revenue delays or loss due to inefficiency or inexperience?
Prior authorization can be a challenging, complex aspect of revenue cycle operations, but there are ways to ease this administrative burden and ensure ASC services are scheduled, authorized, and billed correctly and efficiency. To learn more, access our webinar The Business of Powering Profitability: 5 Overlooked RCM Processes ASCs Must Review Before the End of the Year for Financial Success.