Insurance Preauthorizations Overwhelming Practice Staff?

By Bill Bunker, Executive Vice President, SCI Solutions

According to Health Affairs, practices spend over 1000 hours per year per doctor managing insurance preauthorizations. That’s 20 hours a week or half a staff member dedicated to this activity alone per doctor. Across the industry, this adds up to more than $15 billion per year.

Why do insurance preauthorizations take up so much staff time? In theory, insurance preauthorizations are obtained prior to a patient’s visit to ensure that the patient is covered and the practice will be paid. However, there are three major roadblocks that prevent practices from obtaining preauthorizations in time or at all:

  • Manual Processes: Each payer has their own process practices must follow to obtain preauthorizations. Many still require manual steps of calling on the phone, waiting on hold, etc.
  • Lack of Documentation: Most practices lack an efficient way to track and document the status of preauthorizations, as their EMR or PM system do not offer this functionality.
  • Constantly Changing Payer Rules: Insurance companies are always changing the rules and information required for preauthorizations. Not keeping up can mean payment denials down the road.

There is a better way. Clarity Health offers an insurance authorization solution to take the administrative burden off practices’ plates by initiating preauthorizations within four hours or less of receiving the referral. Before Clarity, Diagnostic Imaging Northwest (DINW) in Tacoma, WA took seven to ten days to contact patients after receiving their referrals because of slowdowns in the insurance preauthorization process. After Clarity, they reduced their initial patient contact time down to just 24 hours.

Average Patient Contact Time for DINW Staff
Source: DINW Case Study



In addition to improving turnaround time, Clarity enabled DINW to increase referral volume without adding staff. “When we started with Clarity, we had three locations; now we have five and insurance requirements have come more stringent,” says Cindy Peterson, Scheduling Manager at DINW.  “Without Clarity, we would have to double our existing scheduling staff. Even then, it might not be possible to keep with the demand if we were still using our paper-based processes.”

DINW is not alone in experiencing substantial benefits from Clarity’s consistent and accurate preauthorizations. From specialists to PCPs to health systems, Clarity customers are able to increase their referral capture rate, reduce payment denials, and increase patient satisfaction, all while reducing their administrative workload. For a practice’s bottom line, the savings are significant.

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