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Solutions emerging for automated pre-certification


While electronic prior authorization of prescription drugs is well on its way to becoming a reality (See “Electronic prior authorization: The solution to physicians’ headache?” in the January 10, 2015 issue of Medical Economics), the precertification and advance notification of tests and procedures are still mired in the dark ages of phone and fax in most practices.

Still, experts say, new technology is poised to transform this area as well, although that shift may depend on changes in how healthcare is reimbursed.

Just how far we are from automated electronic precerts and notifications was shown in a recent report from the Coalition for Affordable Quality Healthcare (CAQH). In 2012, the report said, there were approximately 130 million authorization “events” unrelated to prescription drugs. Of those events, 110 million, or 84%, were handled manually. If healthcare providers had been able to submit these preauthorization requests electronically, the researchers found, they could have saved $13.33 per transaction.

Physicians confirm that prior auth places a significant burden on their practices. Medhavi Jogi, MD, an endocrinologist in Houston, Texas, says that a staff member spends an average of three hours per day filling out prior authorization forms and calling health plans on behalf of the four doctors in Jogi’s practice. The group recently had to add four fax lines simply to handle the increased volume of prior auth requests for their growing practice.

Edward Rippel, MD, a solo internist in Hamden, Connecticut, says, “We expend significant non-reimbursed resources in getting prior authorization for diagnostic testing and medications.” He estimates that a few years ago prior auth occupied between half and two-thirds of the time of one full-time employee.

Some specialists and surgeons have to cope with far more non-drug-related prior auths than do primary care physicians. And hospitals spend up to tens of millions of dollars annually on precert and notification, depending on their size, notes Jim Lazarus, managing director, strategy and innovation, for revenue cycle solutions, at The Advisory Board Company.

While prior authorization continues to be largely a manual process, the barriers to automation are starting to come down. Read on to find out what those barriers are and how your practice can benefit from the latest technological innovations.

NEXT PAGE: Understanding the barriers


HIPAA Transactions

The Health Insurance Privacy and Accountability Act (HIPAA) 278 transaction standard, enacted in the 1990s, was designed to let providers notify health insurers about scheduled admissions and referrals, request prior authorizations, and receive responses from payers through electronic clearinghouses. These are the same clearinghouses practices use to send claims, check claims status, check insurance eligibility, and receive remittance advice.

While the latter transactions are commonplace, the 278 transaction standard still is not widely used in the industry. A few years ago, UnitedHealthcare began accepting notifications of hospital admissions in the HIPAA format, but not many other payers have followed suit, says Lazarus. 

The reluctance of most payers to take 278 transactions has discouraged electronic health record (EHR) vendors from incorporating it into their products. “The payers weren’t interested in it and didn’t implement these standards,” says Ron Sterling, CPA, a health IT consultant in Silver Spring, Maryland. “That created a chicken or egg situation, because the EHR vendors weren’t going to support it until the payers did.”

Frank Ingari, president and chief executive officer of Navinet, a firm that facilitates web-based administrative transactions between providers and health plans, notes that the 278 transaction standard uses old specifications and can’t convey some of the information required for prior authorizations.

RELATED: The prior authorization predicament

Those EHR vendors that have built the 278 transaction into their products, he says, generally use a “bare bones” version that doesn’t work in many cases. And unless something has a high success rate, he points out, clinicians won’t use it.

Health plan websites

The same problem is seen in health plan websites for prior authorization. When practice staffers fill out prior auth forms on these portals, they may obtain approval if they’re for simple, open-and-shut cases. But if anything more complex is involved, the forms may not include all the information required for auto-adjudication, and the request is turned down. Then the doctor or a staff member has to call the plan.

“Nowadays, they have these online methodologies you can use, and for the clearest cases, it usually works OK,” says Rippel. “The problem is that in most of the cases, you don’t have exactly the right buzzwords to choose from somebody’s pick list or dropdown menu.”

This kind of experience drives many practices to download the precert form, complete it and fax it to the plan or simply call the insurer, notes Ingari. “If I submit an electronic form, and three-quarters of the time I get pushed to the phone anyway, a lot of times the provider will say, ‘I’m just going to call.’”

What makes this process so difficult are the large variations in authorization rules, Ingari points out. These vary not only from one specialty to another and among different types of test and procedures, but also among the myriad plans that each insurer (and sometimes, each employer) offers. So it’s impossible to design online forms that will fit all situations.

Even if the success rate were higher on health plan portals, requesting authorizations through them would still be a largely manual process, Sterling notes. First the physician enters the data justifying the test or the procedure into the patient’s treatment plan. Then a staff person goes to the portal of the patient’s health plan and enters the same information again, along with the patient’s demographic data. When a response comes back it doesn’t go into the practice’s EHR; it has to be printed out and reentered.

“Anytime we’re talking about a system where the provider is doing all the work to save somebody else money, you’re pushing costs from one place to another and not necessarily increasing the efficiency of the network,” Sterling says.


NEXT PAGE: Supporting Documentation 


Web Bots rule

Automation would reduce the amount of work involved in requesting prior auths. Progress is starting to occur here, but not much of it has yet reached the practice level.

“Web bots,” or specialized programs that search the world wide web, now are used to pull desired information off the websites of health plans. When a patient comes to a hospital, an imaging center, or an ambulatory surgery center, these web bots can determine whether the patient has an authorization or needs one so that the ordering physician can request it, Lazarus explains. But then the physician’s practice has to use the customary phone and fax process to obtain the authorization.

The main advantage of this “screen scraping” technology is that it spares the staff the time-consuming work of either combing the payer portal to find out what the patient’s benefits are and what requires authorization or waiting on hold to get that information from a health plan employee. 

Unfortunately, the use of web bots requires the expertise of outside vendors that work mainly with healthcare systems. That’s fine for hospital-employed doctors, but independent practices are less likely to have this technology.

If they did have it, Lazarus points out, the same technology could be used to prepare a prior auth request. Web bots could prepopulate demographic and benefits information on precert forms and, as they become more integrated into EHRs, could pull required clinical information into the forms, as well. 

This approach is in a nascent stage. Fewer than 5% of payers accept prepopulated forms, and few technology vendors are doing this today, Lazarus says.

Nevertheless, this is a rapidly-growing area, says Doug Hires, executive vice president of Santa Rosa Consulting. “It’s far from perfect, but there are vendors focused on it,” he says. “The big challenge is integrating it with EHR vendors, passing data and populating data elements.”

At present, he says, revenue cycle management firms that help providers optimize their financial systems are taking the lead in prior auth automation. He doubts that EHR vendors will build all of this functionality into their products. “It probably will end up being more of a collaborative effort, and it will be a foot race to see who can partner with whom to provide some of this.”

Supporting documentation

Health plans frequently ask for documentation to justify precert requests-a sore point for physician practices. Payers generally ask for the last visit note and the last lab result, and they have to be faxed, notes Jogi. “It’s really annoying.”

At least in this area, automation is on the way or has already arrived, depending on whom you talk to. When a payer posts a request for more information on its portal, Lazarus says, a web bot can immediately pull that message off of the website and deliver it to the practice EHR. Then the practice can pull up the requested document, turn it into a PDF, and send it to the payer electronically, either through an encrypted channel or by uploading it to a secure website.

Navinet plans to offer an electronic document delivery service, Ingari says. The lack of secure networks for moving this data has hampered the automation of this process up to now, he adds. However, he’s sure that providers will be able to do this directly with health plans in the future.

NEXT PAGE: Why value-based reimbursement is key to electronic prior auth


Interactive forms

The biggest barrier to automating prior auths, as mentioned earlier, is the inability of static forms on a payer portal to convey all  the information needed to obtain approval from a health plan or third party application. Part of the solution, Lazarus and Ingari agree, is to use interactive questionnaires that can gather all of the requisite data.

“We need to move from a transaction to an interaction, where that interaction is supported by a richer software interaction than you have in a traditional transaction,” Ingari says.

Some plans are starting to offer these types of forms on their websites, he says. “Our payers are investing in making them easier to use and are particularly focused on enabling a more complex process to be handled entirely online. That means richer forms that are more interactive so that the requests can be refined during a work session.”

Rippel says that he has already encountered this kind of interactive form on the website of Availity, a service used by several major plans. “It’s basically a decision tree or an algorithm,” he says. “But that concept makes sense only if it works for all of your patients.”

Value-based reimbursement

While new technology offers promising solutions, Ingari believes that the real driver of prior authorization automation will be the industry’s shift to value-based reimbursement.

As providers take more responsibility for quality and cost, he says, “The auths are morphing from a mainly administrative tool to ensure reimbursement to an instrument of evidence-based guidance. Future auth processes will add value through enhanced functionality such as defining preferred courses of treatment based on clinical evidence.” 

This is already happening in the practice of Jeffrey Pearson, DO, a family physician and sports-medicine specialist in San Marcos, California. As a member of a large primary care group that takes financial risk from HMOs, Pearson seeks approval for imaging tests directly from his group’s utilization reviewers. All he has to do is open a referral page in his EHR, put in the diagnosis, what he’s looking for, the study he wants, and whether it’s an emergency, and he sends the form to the UR staff.  Normally they respond to his request the same day.

For PPO patients, however, he relies on a local radiology group that requests precertifications on behalf of its customers to make sure that its physicians get paid. When he was in solo practice a few years ago, he recalls, prior auth required the usual phone and fax rigmarole.

Automation of prior authorization is coming. It’s already on the horizon for preauthorization of prescription drugs. While it will take longer to automate the precert/notification process, the elements of a viable solution are in sight. 

“This is an area that can be automated as payers become more willing to cooperate,” Lazarus says. “In the next three to five years, we’re going to continue to see a rapid evolution, but it will be driven by what the payers are willing to do more than what the providers want.” 

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