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Knowledge Center

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

January 23, 2024

The biggest adjustment involves altering processes so prior authorization decisions are automatically embedded into electronic health records. The change will be a dramatic one: Prior authorization represents one of the most manual processes carried out by health insurers, according to a 2022 survey by the Council for Affordable Quality Healthcare, a nonprofit that advocates for electronic information exchange. Just 28% of insurers processed prior authorization requests electronically, the report said.

Come 2027, the rule requires insurers to adopt the Health Level 7 Fast Healthcare Interoperability Resources as the industry’s technology standard. Insurers will have to automatically send prior authorization decisions to patients, providers and other payers when requested, said Robert Tennant, vice president of federal affairs at the Workgroup for Electronic Data Interchange, an independent advisory group that makes technology recommendations to federal regulators.

Smaller insurers will likely contract with third-party app or patient portal vendors to send health information directly to members, Tennant said. That could create privacy issues because many of those vendors are not subject to the Health Insurance Portability and Accountability Act of 1996’s standards and could sell patients’ sensitive health information, he said.

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