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Healthcare providers often expend significant time and money on obtaining prior authorizations for services. Although the effort can present a substantial burden for clinicians and staff, it is important from a payer perspective to ensure proper payment and to avoid duplicative or unnecessary services (in the context of preauthorization, payer may refer to commercial health plans, Medicaid, and/or Medicare Advantage).
In this edition of the Healthcare Challenge Roundtable, senior provider and health plan leaders examine the difficulties associated with preauthorization and offer strategies for how stakeholders can collaborate to optimize the process. Participating are Jeffrey Hankoff, MD, medical officer for clinical performance and quality, Cigna; Sarah Knodel, system vice president, revenue cycle, Baylor Scott & White Health; Soujanya Pulluru, MD, medical director, DuPage Medical Group; and Krishna Ramachandran, chief administrative officer, DuPage Medical Group.
Sarah Knodel: There is a huge struggle right now regarding this topic. Baylor Scott & White Health has added technology over the years to streamline the insurance verification and preauthorization process. However, payers continue to implement more restrictions and requirements, and we’re starting to lose some of the efficiencies we gained a few years ago through automation.
It seems like each day I receive an email from our managed care department saying there are new authorization requirements from various payers, and staying on top of these changes can be daunting. Trying to ensure our technology stays updated with the latest requirements and that our Access Services staff and clinicians are aware of constantly changing requirements that differ by payer can be challenging. As an industry, we must find the balance between limiting the administrative load and making sure that the proper care is provided with the highest level of quality and at a reasonable cost.
To address some of these challenges, we should bring all stakeholders to the table. The good news is that we are starting to see and hear about this level of collaboration. For example, we were recently approached by a company representing a top commercial payer, and they asked us to work with them to review and reduce the administrative burden associated with determining inpatient versus observation status. It was exciting to see the payer initiate this dialogue in an effort to revamp the process. When both sides clearly understand each other’s pain points and what each one is trying to achieve, that is a solid first step. I feel confident that with everyone working together, we can figure out a better way to do this while also protecting the interests of both sides.
Krishna Ramachandran: The biggest disconnect we see at DuPage Medical Group involves making sure we’re on the same page with patients’ expectations. It can be challenging when a patient calls a payer and gets the impression that a certain procedure or medication is approved by the plan but then comes to us and we indicate there are clinical guidelines that need to be taken into consideration, and those guidelines preclude the patient from receiving the treatment. This disconnect is a pain point on all sides of the equation—for patients, providers, and payers.
As such, I would say that clear expectation setting across the board would be helpful, especially regarding what’s covered, what’s not covered, what may be covered, and what may be concerning to the network.
Soujanya Pulluru: The lack of consistency is definitely a problem. When patients call their insurance providers, the message that they seem to be receiving—I don’t know what’s conveyed—is much more diffused and broad-based as far as what services are initially available. In other words, they are hearing mixed messages on what the first level of service is, causing a frustrating disconnect.
For example, if I as a primary care physician refer one of my patients to orthopedics, I would tell the person, “We have a great orthopedics department with plenty of choice. You are welcome to choose based on what you want, but here are the doctors I would recommend.” Oftentimes, if the patient decides to see another doctor somewhere else for whatever reason, and the patient calls his or her health plan, there seems to be a different message from the payer. The patient is told that he or she can choose any physician as long as the doctor is contracted.
It leaves us in a bit of a quandary. Again, this may not be the intention of the payer, but it appears to be the message that many of our patients are getting.
Jeffrey Hankoff: To make progress, it is important that we all appreciate each other’s perspectives and pain points. From our vantage point, preauthorization involves a balancing act. For 85 percent of our clients, we handle administrative services only—we administer their company health plans. As such, we have a fiduciary responsibility to make certain our client’s employees and their dependents receive evidence-based care.
Even though preserving clients’ interests is our primary focus, we acknowledge that the preauthorization process is a drain on providers, and we are trying to address that. The major reason that we see services being denied before ultimately being approved is that we don’t have the information we need for approval by the time we have to make the initial decision. Likewise, the major reason that a denial ends up being reversed on appeal is that the information we require becomes available. We’re ultimately dependent upon providers pushing data to us.
One of the ways we’re looking to reduce this dependency is by employing technology that automatically pulls information from electronic health records so we don’t have to rely on office staff or someone else in the provider organization to send the appropriate material. Although this is new for us and we’re still reviewing potential issues, such as obtaining the right HIPAA clearances and not inadvertently gaining access to information we shouldn’t have, it may solve a lot of problems if we can work through the logistical hurdles.
Ramachandran: There is a tremendous opportunity to have more up-front clarity about the guidelines and requirements. It would also be helpful if things were consistent across payers. Right now there is a significant amount of variation, which can be confusing and add layers of complexity.
Also, payers should make sure that all the various arms of their entities are communicating the same message. We’ve noticed that when we call our payer partners, the information we receive from the customer service representative is often different from what might be listed on the website or in the portal. When there is a disconnect, it sets up the entire team for failure—not just the provider and patient, but our payer partners as well.
Without having more clarity and consistency, we will always be swatting flies instead of closing the window. Every time there is rework or our doctors have to take time out of their busy schedules to call a medical director on the payer side, that’s an indication of process failure. If we know up front what information is necessary and can collect and package it to make the case for approval, then that is a “shutting the window” opportunity.
Hankoff: Cigna has publicly posted coverage policies that outline the criteria for virtually every procedure or service for which we require preauthorization. The key is getting the critical information needed for approval more quickly. If we don’t have to spend time chasing after details, it’s going to benefit the provider, the patient, and us. The more we improve our abilities to automatically share information, the more we will ultimately advance the process.
Knodel: Although certain payers are good about posting their requirements and having detailed information available in their web portals, not all are as robust in providing up-front guidelines as others, and that hinders the process—making it more time-consuming and manual. I think if payers consistently implemented best practices around guideline transparency, it could make things better. When more complexity is added to the preauthorization process, it naturally leads to less automation and to the need for us to call a payer for detailed information to ensure we are financially securing an account. That process increases administrative costs for both sides because it involves human intervention.
That said, it would also be helpful if clinicians were more consistent in providing timely and complete medical documentation. If my department doesn’t have thorough information about what a physician has done up to the point of requesting a service, we can’t provide that information to the payer and obtaining preauthorization becomes more difficult, resulting in more delays and possibly requiring involvement from the physician to ensure the authorization is obtained for the service.
Ramachandran: DuPage Medical Group has many contracts for which we are at some level of financial risk. It would be ideal to be exempt from the preauthorization process in instances when we’ve demonstrated that we are in a risk-sharing arrangement and using decision-support tools.
For example, at the point of ordering, our physicians use a tool from the American College of Radiology that asks the doctor a series of questions, such as “Have you tried these lower-cost, equally efficacious alternatives?” By taking on a risk-sharing arrangement and using decision-support tools, we are clearly on the hook for total-cost-of-care reduction and are already focused on keeping costs in check. Removing the burden of preauthorization in these circumstances would be helpful.
Hankoff: We frequently receive requests for what’s called “gold carding”—basically a free pass for organizations or individual providers that repeatedly demonstrate top performance and low costs. We have experimented with gold carding before with groups and individual providers that seem to have a history of good utilization. However, we have found that excellent performance tends to slip.
The one exception is when the provider is accepting some form of risk and physicians have an incentive to manage utilization. In these situations, the dynamic changes. Providers then manage their own preauthorization and work more collaboratively with each other. As they accept more risk, providers police themselves because it’s in their interest to do so. Over time, the preauthorization process shifts away from asking payers for approval and more toward seriously considering whether the available evidence supports the service being requested.
Hankoff: More than ever before, patients are coming into their doctors’ offices with preconceived notions about what’s best. In many cases, they have the impression that they need something they don’t. For example, most low back pain will resolve on its own through either time or conservative medical management. Yet patients may come into the office and demand an MRI because they’ve read that an MRI is the best diagnostic tool.
Bottom line is we have a much more knowledgeable and empowered population, but that knowledge is not always accurate and that empowerment sometimes leads to pressure on physicians to order tests or procedures that they don’t think are going to be in the patient’s best interest. When the provider has no risk, it may be easier to check a box and send a request even though the provider may not agree that the patient needs the test. On the other hand, when the provider shares some of the risk, it does change the dynamic.
Both providers and payers have a responsibility to educate patients and help them understand that doing more is not always better. In fact, performing unnecessary testing often uncovers incidental things, which leads to further testing—and these procedures may have complications that introduce more risk.
Pulluru: Patient education is critical. Many people feel that because they have health insurance, there is a host of tests and labs that they should receive automatically. However, given that medicine is practiced by evidence-based guidelines, both providers and payers should educate patients that if a specific test is not medically warranted based on evidence, it will not occur—even if that test is technically covered by insurance.
Imaging is an area where these types of conversations frequently come into play. Patients may say, “I want a CT because my neighbor had cancer.” I tell them that it’s my job to assess risk versus benefit. Most patients receive this conversation well, but it is helpful when they also hear it from their insurer.
Both sides must be aligned on clinical appropriateness and evidence-based care. If the provider is saying, “Yes, you should get this done every year,” and the payer is saying, “You don’t need to have it done until the five-year mark,” then that can be confusing for the patient.
Ramachandran: DuPage Medical Group has made investments in technology over the years, including systems focused on referrals and preauthorization. We’d love it if more of our payer partners would test these solutions with us. It would be great to take data that already exists in our electronic health records and send them in real-time to our payer partners, allowing us to immediately know whether the procedure was approved, denied, or in need of further information.
If you had asked me 10 years ago whether this was possible, I would have said it is a pipe dream. However, my thoughts on that are changing. We now have ways of checking payer benefits when our physicians place orders. We can determine in real time whether patients are eligible for insurance and what their copay is. There are lots of opportunities to get more out of these systems, and I hope in the future we can better collaborate with our payer partners to move the process forward.
Knodel: Even though there have been advancements in technology over the past few years, preauthorization solutions still aren’t quite where they need to be. However, as these solutions are continually refined, I would expect the industry to start making progress in this area. I think progress will require continued innovation on the part of revenue cycle vendors and more transparent, robust, and actionable data and authorization requirements from payers.
A difficulty for us at Baylor is that we currently live in two worlds. For our employed physicians, we are responsible for initiating and obtaining preauthorization for services. Conversely, the independent physicians who refer patients for care at our facilities are acquiring their own approvals, and our role is to make sure they have done that in a timely and effective way prior to the rendering of services at one of our facilities. To be truly beneficial, preauthorization solutions are going to have to be flexible and meet the various needs of providers.
Hankoff: The more we can automate and leverage the electronic health record, the more we can reduce reliance on faxes and other manual processes. As we become more proficient at the automated parts of this, we should see fewer and fewer bottlenecks.
Ramachandran: With all the investments healthcare providers have made in technology, we should be able to figure out a way to exchange preauthorization information. We can exchange medical records and engage in e-prescribing. We have shared platforms, so the time is right to leverage our technical capability and improve the preauthorization effort. We would certainly be amenable to a pilot if there were such an opportunity.
Pulluru: Absolutely, and there is low-hanging fruit we could address during a pilot—things like repeat testing, chronic conditions, and chronic medications that don’t require as much scrutiny.
Knodel: Real-time preauthorization is feasible, but only if the payers want it. The reason I say that is most of our managed care payers have 48 to 72 hours to respond to an authorization request. These delays, which are built into the payer’s workflow, are anxiety-provoking for the patient and physician. In limited instances, we even have some payers that make us wait up to 29 days to receive an authorization.
In these cases, the preauthorization delay is not because we haven’t started the process or provided the necessary information, but simply because of the administrative timeline that they’ve built in to their workflow. Although I think real-time authorization is possible, it’s a matter of whether all the stakeholders are willing to pursue it.
Hankoff: As I mentioned before, we’re looking at new technology that will allow us to pull in information. If we can agree on ways to exchange data, then we may be able to avoid some of the traditional back-and-forth.
Often a provider depends on a front-office staff person who doesn’t have any clinical training to submit the preauthorization.
The staff person may not know what information to send or which data are especially critical. In these situations, there is a lot of wasted time communicating back and forth and trying to get all the appropriate details. If we could automate the process by which we receive the information we need up front, it would make everyone’s life easier.
Our medical directors are the only ones who can make adverse medical-necessity determinations—nurses and nonclinical staff cannot issue medical-necessity denials—and medical directors are not incentivized to deny services.
What we’re trying to do is minimize the time needed to get to approval of coverage of the best possible care. If something should be approved, arriving at that decision faster is in everyone’s best interests. On the other hand, if it’s not an approvable service, we want to minimize the time to reach that answer as well.
If we have all the information up front, we can arrive at what we feel is the right answer as quickly as possible. We believe that’s the fairest approach for the patient and the provider.
Kathleen Vega is an HFMA contributing writer and editor.
Jeffrey Hankoff, MD, medical officer for clinical performance and quality, Cigna;
system vice president, revenue cycle, Baylor Scott & White Health; Soujanya Pulluru,
MD, medical director, DuPage Medical Group; Krishna Ramachandran,
chief administrative officer, DuPage Medical Group.
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