The high cost of obtaining authorizations for care


Health care costs are staggering. American taxpayers, consumers and employers pay more per capita for health care than any other country in the developed world. As a result, health plans are under enormous pressure from employers and regulators to contain medical costs, which means limiting member use of care services to that which are deemed clinically necessary. In an effort to manage this utilization, insurers have introduced and regularly updated thousands of arcane rules that providers must adhere to on behalf of insured enrollees to receive reimbursement for the health services they render.

Recent shifts in benefit plan design have resulted in high-deductible health plans and the narrowing of provider networks that are available to insured members that, combined, make care navigation for patients more expensive and complex than ever before. Because of many of these changes, when physicians refer patients to specialists or order outpatient procedures, such as diagnostic studies or lab tests, the staff of the referring practice and the provider organization receiving the referral often must check to confirm compliance with insurance rules before the case can be seen, and certainly prior to payment.

This is time-consuming, requiring provider staff to manually check payer websites to confirm network participation and member eligibility and to also verify that the referred procedure satisfies the unique health plan authorization requirements based on the patient’s clinical indications. Worse, often health plans require the referring physician to get on the phone to justify the procedure or they require providers to demonstrate medical necessity by faxing or otherwise sending the health plan clinical documentation from the patient’s medical record.

This process can take days and in some case weeks, delaying patient care, costing resources and time, and resulting in rescheduled appointments. In fact, physician practices and hospitals spend $20 billion annually interacting with health insurance companies regarding authorizations. Hospitals and other care organizations in the U.S. write off approximately $40 billion annually either as a result of these inefficiencies, or because the insurance plan denies payment. Too often, insurance authorization is a major pain point for health care providers. According to a recent SCI study, 67 percent of providers said authorization workflows are a significant or major issue, resulting in operational challenges, lost productivity, payment denials, decreased patient satisfaction and/or lost revenue. What is worse, patients and their families are often stuck in the middle, waiting, wondering or having to call either their doctor’s office or the insurance company to find out the status of authorization.

Consider this scenario: you begin to have troubling migraines, crippling you from normal tasks, including being able to go to work. You visit with your primary care physician, after first trying over-the-counter migraine medications, to no avail. After listening to your testimonial, your primary care physician decides to refer you to a neurologist for further analysis and testing; she orders a CT scan. Afraid of losing more time, and life quality, to migraines, you schedule your appointment with urgency, and have your CT scan performed, giving little thought to insurance authorization. Or, more likely, the appointment can’t get scheduled until the provider receives authorization, or the appointment is scheduled only to be rescheduled days before the procedure, pending hearing back from the insurer regarding authorization. Either way, this is where the health care process begins to break down, costing you, your provider and the overall system money.

Making this issue all the more relevant, the terms “care coordination” and “population health” both rely upon a health system’s ability to collaborate with practices outside of their institution to achieve cost-effective coordination of patients through the care community. A network-driven approach to these issues helps independent provider practices and health systems better cooperate around referrals, orders and treatment options; they absolutely require that smart technology systems eliminate paper-based manual processes, verify insurance, obtain authorizations and provide feedback loops for care delivery and business process management.

As such, good insurance authorization processes and practices should be part of any hospital’s strategic growth strategy – as they impact a health system’s ability to serve patients and keep them on point with the right treatment regimens – all of which are instrumental to growing potential revenue and improving patient loyalty and health.

To learn how insurance authorization technology helped Baptist Health Care streamline authorizations and reduce costly authorization-related reschedules by more than half, we invite you to join our webinar on August 11.

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