Prior Authorization Trends & Opportunities

While prior authorization serves as vital checks and balances, ensuring clinical quality and preventing fraud, the administrative burden it imposes on providers and payers alike has led to an industry-wide reevaluation of certain codes and an increased push towards technology for auto-approvals and Gold Carding.

Now, it's up to payers to encourage provider adoption of the technology by offering platforms with user-friendly interfaces, intuitive design, and seamless workflows.

Streamlining prior authorization improves the overall experience for payers, providers, and members to ensure timely care and a more efficient healthcare system.

Tune in to discover:  

Host: Today, we’re talking about Prior Authorization Trends & Opportunities with Chris Hugenberger. Chris has been in healthcare software for nearly 20 years, working on both the provider and payer sides for operations, implementation, and product development. He has niche expertise in utilization management and prior authorization software. Welcome Chris.

Chris: Hey. I’m excited to be here.

Host: Chris, recently, we’ve seen a wave of health plans remove prior authorization requirements for specific codes. Some national plans have eliminated up to 20 percent of their overall prior auths. It seems like a big shift in a relatively short amount of time. What do you think is driving this?

Chris: The industry has seen a big shift towards a more efficient prior authorization system. It’s important to note that prior authorization is an important system for checks and balances between payers and providers.  It ensures standards are being met for clinical quality and medical necessity, and it can even act as a deterrent to healthcare fraud. But, it’s not necessary to get prior authorization for services that have been historically approved in every instance. That creates an administrative burden on provider offices to submit a request for things simply for the sake of keeping the payer informed. And it can be quite burdensome. The provider’s office has to figure out what the system is for submitting each different insurance company’s request. You know, every insurance has its own process for this. At this point, nearly all plans have a portal, but some are easier to use than others. If the user interface is especially clunky, providers might find it easier to just fax or phone the information instead of navigating to the portal. So, unfortunately what is still happening is that providers are using fax and phone.

Host: Wow, I can’t believe people are still using fax. Seems a bit old school. But I can see the resistance to adopting something new, especially if the technology is hard to navigate.  

Chris: Same. So, you’ve got the providers who are weary of submitting auth requests that they see are approved time and time again. Then, on the payer’s side, it’s an administrative burden to process all of the authorizations, especially if 90% are going to be approved anyway. And then, you’ve got the staffing of nurses and doctors that are sifting through the requests. You don’t want high-value staff spending time on administrative formalities. You want them working at the top of their license. The other consideration is the delay in care for members as they wait for the providers and payers on the backend. Why not remove the items that are always approved? So now, you can set the member up with the next steps while they’re still in the office. You know, “Mrs. Smith, you can go get your MRI or schedule your procedure, etc.” This has a huge effect on member satisfaction. The member doesn’t have to wonder if insurance will approve it or not. They don’t have to think, “Should I call to figure out if insurance will pay for this? Is the provider actually following through with the request?” So, there’s a lot of incentive for all stakeholders—members, providers, and payers.

The first step in making prior authorizations more effective is to make sure that prior authorization lists only include things that actually need to be reviewed. That’s why we’re seeing this shift in the industry to refine the prior authorization lists.

Host: That makes sense. How are plans determining what goes on the prior authorization list and what codes are safe to remove?  

Chris: Great question. In the 2024 Medicare Advantage Final Rule, CMS released some clinical criteria guidelines for prior authorization so plans could develop their prior auth lists and approval rules. The idea is to create transparency and not have huge discrepancies across different health plans. Also, CMS decided to require all Medicare Advantage plans to stand up a Utilization Management Committee to conduct annual reviews of prior authorization guidance. The intention is to ensure members have continuity of care. Plans also have their own internal statistics to guide decisions for what goes on prior authorization lists. The CMS guidance provides structure, but there’s still flexibility, so plans can customize this list for the needs of their organization.  

Host: Going back to something you said earlier, you mentioned the administrative burden between providers and payers communicating prior authorization requests and status updates. It sounds like a cumbersome process for providers with no standardization between plans and a number of different portal interfaces. How can plans make this easier for providers? But above all, what’s the best way to streamline this so members get timely care so they’re not paying out-of-pocket costs unnecessarily, or worse, abandoning the treatment because of delays?  

Chris: Yes, you said it. Member care is at the heart of this topic. We’ve got to ensure our members get timely care that aligns with evidence-based practice and clinical guidelines. We can’t let the process become a health risk to the patient; that’s counterproductive.  

I read a 2018 American Medical Association survey that found prior authorization was responsible for over 90% of care delays. You might think, well, that study was done 5-6 years ago, but the reality is that many providers still rely on fax to send prior authorization requests to health plans, and the process is laborious with a lot of back and forth waiting for a response—and potentially having to respond to a request for more information, waiting for another response. You can easily see how this method of approval is administratively inefficient and delays time to care. So, the first thing is moving the system to electronic delivery and getting providers on board with using the technology.  

CMS has done a great job encouraging this with its Interoperability initiative and specific guidelines for prior authorization. Impacted payers would be required to maintain an API for provider access to prior authorization information. It’s recommended that if a plan denies an authorization request, they provide a specific reason why. And then, CMS has proposed some guidelines on appropriate timeframes for plans to respond to providers. If the request is urgent, they’re trying to get the timeframe down to a 48 to 72-hour turnaround time, and for non-urgent requests, they’re pushing for 5-7 days. And then plans themselves are taking the initiative to evaluate their own data and adopt technology for automation and machine learning insights.  

Host: What are some ways to encourage providers to adopt the technology?  

Chris: There are a lot of ways to incentivize providers to adopt the tech. One. Auto-approvals. The incentive is the instant or at least quicker response, so they know they’re done or at least what the next step is—like, “Oh ok, that was easy. Or, I need to provide more information.” Versus sending a fax, waiting, and then dealing with the back and forth. I think the back and forth is extremely painful for a provider’s office. If plans can communicate why the portal is better—you can get auto-approval and instant feedback—that’s a good incentive to use the technology.  

There’s also an educational component. Plans can offer educational resources to providers. But, you know, providers are busy. So, really, if the user interface of the portal is intuitive, that’s the best way to get provider adoption, and you won’t need additional training. Think of it like this: when you log in to Facebook or Instagram, or even when you navigate a website, if it’s built right, it takes the users on a journey by anticipating their next action. It’s clear that the site wants you to scroll, click a button, enter information, and watch a video. Facebook would never make it, if people had to dig for what they’re looking for. Facebook knows your needs better than you do.

Host: (Laughs) Yes, exactly. That’s a great point. I get frustrated with processes and systems that aren’t obvious. No one wants to waste time navigating, so I can relate to the natural avoidance of cumbersome systems.  

Chris: Exactly. Providers are working with a variety of payers within each of the spaces: Medicare,  Medicare Advantage, Medicaid, and Commercial. So every population and every payer they work with, they’re going to a different site. It’s kind of a waste of time to train them on different systems. What if they only have a patient from a certain portal once a year? That would be a waste of time to train them on that system. It’s got to be intuitive for it to be useful and used.  

Host: Can you give me an example of what an intuitive user interface looks like?  

Chris: Yeah, so a lot of it is based on workflows. You know, making sure that each screen contains the correct information and prompts that are relevant to the phase of the submission process that the provider is in. You don’t want people excessively clicking to get to the next steps or having the prompts out of order for how the submission process would naturally be done. Product Developers have to role-play and put themselves in the provider’s shoes. That’s why we have providers on our product teams—we have to be able to get into their brains to understand their perspectives.  

Host: What kind of reporting and data insights drive prior authorization rules and automation?  

Chris: There are a lot of ways data insights can drive automation. Payers can use reporting to see which providers are using the portal vs. fax or phone. Maybe an outreach campaign or educational training would be helpful for providers who are late adopters. Certain providers have high volumes of certain submission types,  and the data shows they get approved every time. Ok, well, there’s no need to keep making them go through the same process if they have a consistent and high approval rate. So, we’ll award them with a Gold Card status—meaning they don’t have to submit for prior authorizations for specific codes or we automatically approve any they do send in. Then, on the flip side, there’s Red Carding, where the historical data suggests that certain providers need more oversight, so all of their authorizations need to be reviewed.

We also use analytics to shape the rules that we build. Let me give you an example. Maybe a certain code isn’t approved all of the time so it has to be on the prior auth list, but maybe it’s approved all of the time under certain conditions. Let’s say a particular code, it will be approved if it’s both in-network and at a particular place of service. We can see these types of insights in the data and identify it as an opportunity to automatic approvals.  

Host: It’s incredible to be able to extract insights from the data and identify opportunities for automation.  

Chris: I agree. It’s an exciting time for the industry.  

Host: Chris, thanks for joining the podcast today.  

Chris: You bet.

Host: Thanks to our listeners. If you found value in this episode, please leave a review on Apple Podcast or Spotify and share it with your colleagues on LinkedIn.