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Knowledge Center

Episode 162: Workgroup Voices, The Inner Workings of Prior Authorization

August 17, 2023

Written by Maxim Abramsky, AVP Product Management, Edifecs

Prior authorization has become increasingly burdensome for patients, providers, and even health plans. Most prior authorization requests are done manually, in a non-standard process that often results in substantial administrative costs, provider burnout, care delays, and in some cases critical adverse health events. As a result, it’s getting the attention of policy makers, which has the potential of drastically changing the way prior authorizations are conducted. So, what should you expect when it comes to managing – or solving for – prior authorization?


Collaboration between health plans and providers is essential.

Although new and evolving technology can help solve prior authorization challenges, we won’t see substantial improvement unless we address the entire process and workflow between health plans and providers. Most of the technology aimed at automating prior authorization is built for a health plan or a provider, but not both. Today, providers are expected to work within multiple workflows utilizing many channels, primarily phone, email, fax, and PDFs, and occasionally portals, to accommodate various payer processes for prior authorization approvals. As you can imagine, managing these multiple processes, channels, and portals can create massive inefficiencies for a provider that can result in unmanageable administrative costs, delayed care, and suboptimal health outcomes. These inefficient processes can also contribute to provider burnout, dissatisfaction, and growing friction between the plan and provider.

Prior authorization is a business problem, not an IT challenge. To solve for it, organizations need to address collaboration workflows and payment processes, EHR integration, and adopt technologies like artificial intelligence, including machine learning and natural language processing, and Fast Healthcare Interoperability Resources (FHIR®) Standards.


Electronic does not always mean automated.

Payer and provider organizations may have a portal or PDF for prior authorization submissions and approvals managed in an electronic format. The 2022 CAQH Index reports that just 28 percent of providers use an X12 278 electronic transaction for their prior authorizations , while 39 percent use a payer web portal or interactive voice response (IVR) system. A third of providers continue to use phone, mail, fax, or email to conduct prior authorizations. In terms of portal use, health plans may not realize that the process is still not automated as the entire workflow is not managed within the portal itself. But what if it could be? To truly automate prior authorizations, it would require a single, standard process shared between plans and providers with real-time data sharing. Managing the entire process within the provider’s EHR would automatically pull all relevant patient data required for prior authorization submission, along with the correct codes, to help ensure a correct and fully filled-out submission the first time. On the health plans side their process is managed similarly. One portal to do it all that integrates back with the provider’s EHR for fully automated prior authorizations.


Legislation is increasing at a high rate, altering how prior authorizations are managed.

States like New York, California, Texas, Michigan, Pennsylvania, and many more, have already passed or are reviewing prior authorization legislation. Legislators are mandating that prior authorizations become timelier in order to ensure the avoidance of adverse consequences. New York’s recent law, for example, requires a determination for a non-preferred drug to be made within 24 hours or it will be auto approved if documentation is not received on time. California’s Senate Bill 250 prohibits prior authorizations for any healthcare service which the health plan has approved at least 90% of the time in a one-year contract period. Pennsylvania legislation says if the prior authorization isn’t approved within the designated time period, then the provider automatically gets implied authorization. The list of states taking action goes on and is expected to continue to grow.


National associations, like the American Medical Association (AMA) and the American Psychiatric Association (APA), are taking steps to further prior authorization legislation at the national level. The APA model legislation for states is designed to effectively prevent prior authorization from interfering with patient access to care. There is also growing interest and recognition at the federal level: The Gold Card Act, for example, originally introduced in West Virginia in the state legislature in 2019 has now been introduced in Congress as the Gold Card Act of 2022 (H.R. 7995) and has 23 bipartisan cosponsors. If enacted, the bill  would allow some providers who reach a certain approval rate to bypass Medicare Advantage prior authorizations all-together for a determined period of time.

Rather than wait for final rulings and potentially fall behind mandate deadlines, organizations should be advancing collaboration, standardization and automation to better serve patient, provider, and health plan interests. For health plans, improving utilization management processes will both reduce costs and attract new business.

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