A study conducted by CAQH CORE, a nonprofit alliance committed to streamlining the business of healthcare, found that moving to fully electronic prior authorizations could save the medical industry $454 million annually.Here are other key facts about electronic prior authorizations from the study.
An electronic standard for prior authorizations has been in place since the early 2000s, but industry adoption remains low. Barriers include lack of provider awareness, vendor support, and state laws that require manual processes.
Prior auths are costly
While spending on prior authorizations constitutes only 2 percent of the total expenditures on medical industry transactions, it is the most costly, time consuming administrative transaction for providers.
On average, providers spent almost $11 per transaction to obtain a prior authorization manually and nearly $4 using a web portal, which the study considers a partial electronic transaction
Cost savings
The possibility for savings is greater for providers versus plans, with a savings opportunity of $355 million for providers and $99 million for plans.
Moving from web portals to fully electronic transactions could reduce physician burden by $2.11 per transaction.
Time savings
On average, a manual prior authorization required 21 minutes of provider staff time, while electronic prior authorization transactions required four minutes. Some providers reported that their staff spent as much as 45 minutes on manual prior authorization and as much as 18 minutes to complete an electronic prior authorization.
Conducting prior authorizations via web portal consumed eight minutes-four minutes more than a fully electronic transaction.
