Posted on July 27, 2022
Commonwealth Providers, Payers, Technical Service Providers, Government Officials Come Together
BOSTON, Mass. (July 27, 2022)
The Network for Excellence in Health Innovation (NEHI) and the Massachusetts Health Data Consortium (MHDC), with the support of the Massachusetts Health Policy Commission, have formed a coalition of providers, payers, technology service providers, and government officials to tackle the administrative burden associated with healthcare’s prior authorization process in the state of Massachusetts. Within the next two years, the coalition will outline the needs of each sector and make pragmatic recommendations for necessary technical and workflow changes that facilitate the adoption of automation solutions.
Prior authorization remains the primary utilization and cost management tool many health insurers use to try and rein in their care-based expenses. “Prior auth” processes, though, are often cited by physician offices, hospitals, and health systems for their administrative burden and costs. All sides are looking for a better way to work together and are hoping that automation can be an important solution.
Prior authorization is an essential component of the healthcare system, as it is meant to ensure patient safety, appropriate utilization of clinical and other services, and that the care is delivered at the proper site of care. Despite its goals to improve quality and cost-effective care, the implementation of prior authorization processes is not without several burdensome elements and effects.
- Cost. It is estimated that a single prior authorization transaction completed manually (i.e., via telephone and fax) between provider and payer costs $14.49, contributing to an estimated annual administrative expense of $686 million on prior authorizations between 2020-2021.1
- Time. According to survey findings from the American Medical Association, physicians and their staff reported spending approximately 13 hours per week preparing and submitting prior authorizations.2
- Delays in Patient Care. Many physicians argue that the prior authorization process, particularly the lack of transparency in medical necessity criteria, contributes to administrative burden (e.g., appeals), which in turn can result in patient care delays.3 Furthermore, peer-reviewed studies have published similar findings, reporting evidence of care delays due to prior authorization requirements.4–6
Professional organizations and state and federal policymakers have advanced various methods to reform prior authorization. Although some of these have provided a certain measure of relief, most recommended reforms have not been implemented. Certainly, they have not achieved the scale needed to address prior authorization concerns. There is, however, growing consensus and evidence, as well as regulatory activity at the federal level*, indicating that automation—although not a panacea—holds significant promise, and little downside, in reducing both the cost and burden associated with prior authorization. Automation of prior authorization will mean that a provider and payer can determine whether to proceed with a particular service for a given patient using information exchanged electronically and with minimal human intervention.
Other industries have managed automation of complex transactions (e.g., SWIFT, a collaboration among banks to support millions of intra-bank transfers world-wide; travel sites, enabling multiple airline and hotel bookings). Moreover, Massachusetts stakeholders seem motivated to overcome past barriers (complexity, regulatory ambiguity, competing priorities). MHDC and NEHI led a productive kick-off discussion with stakeholders, including the Commonwealth’s major insurers and health systems, technology service providers, EHR (electronic health records) vendors, and federal and state representatives, during which the parties discussed the workflow- and technology-related requirements for automating the prior authorization process, and identified ways to construct manageable, incremental next steps. The coalition will identify several clinical services for which automation templates will be built; in addition, the benefits of each step of the automation process will be agreed upon and clearly stated.
After this initial work, the project’s next phase will include a more detailed assessment of the supports and incentives required to move the adoption of prior authorization automation forward with reasonable speed and scale.
“There is little doubt that this is a challenging project, but its potential impact is significant. Massachusetts has consistently led collaborative change to adopt new healthcare technologies,” said Denny Brennan, Executive Director and CEO of MHDC. (Read more about Massachusetts’ early adoption of Admissions, Discharges, and Transfers [ADT] notifications and e-prescribing).
“Furthermore,” added Wendy Warring, CEO and President of NEHI, “we recognize and can coordinate the factors that will drive its success. We have existing, defined [FHIR-based] standards, we understand the clear business value in implementing automation, and above all, we appreciate that collaboration is key.”
By working together, this coalition, brought together by NEHI and MHDC, will identify recommendations that coordinate with federal activities but that allow Massachusetts to take a leadership role in implementing prior authorization automation through a collaborative effort.
At the end of the day, NEHI and MHDC and its prior authorization coalition hope to improve patient care and care utilization throughout Massachusetts, and make the patient experience for people in the Commonwealth more transparent, streamlined, and cost-effective.
Look for updates on this work this fall.
**
The Massachusetts Health Policy Commission (HPC), charged with monitoring statewide healthcare spending and providing data-driven policy recommendations regarding healthcare delivery and payment system reform, is the main sponsor for this work. The HPC continues to focus on removing both costs and administrative burden from the prior authorization process, consistent with its goal to advance better health and better care – at a lower cost – for all residents across the Commonwealth.
For more than four decades, the MHDC has been the trusted and objective facilitator of health information and technology transformation across the healthcare industry. MHDC recently merged with the New England Healthcare Exchange Network (NEHEN), a consortium of regional health plan and provider organizations that provides innovative solutions that improve healthcare quality, safety, and efficiency. Both organizations are membership-based, have relevant technical expertise, and have longstanding relationships with key technology service providers, health plans, and provider systems across the state.
NEHI is a national, non-profit member-driven organization dedicated to exploring and solving complex problems in healthcare by researching innovations that address critical issues in healthcare and leveraging its members’ experience and expertise to produce policies and practices that can be applied by those who have a stake in their success.
Together, MHDC and NEHI have successfully gathered key experts and stakeholders to the same table to align on the essential elements of automation that will result in its successful adoption and implementation among Massachusetts payers and providers within the next two years.
References
1. CAQH Explorations. 2021 CAQH Index - Working Together: Advances in Automation During Unprecedented Times.; 2021. Accessed May 19, 2022. https://www.caqh.org/sites/default/files/explorations/index/2021-caqh-index.pdf
2. American Medical Association. AMA Prior Authorization (PA) Physician Survey.; 2022. Accessed May 19, 2022. https://www.ama-assn.org/system/files/prior-authorization-survey.pdf
3. Warring W, Bedel LEM. Streamlining Prior Authorization: Final Report & Recommendations.; 2021:59. Accessed May 19, 2022. https://www.nehi-us.org/writable/publication_files/file/11.18_pa_white_paper.pdf
4. Lu CY, Adams AS, Ross-Degnan D, et al. Association Between Prior Authorization for Medications and Health Service Use by Medicaid Patients with Bipolar Disorder. Psychiatric Services. 2011;62:186-193.
5. Ferries E, Racsa P, Bizzell B, Rhodes C, Suehs B. Removal of Prior Authorization for Medication-assisted Treatment: Impact on Opioid Use and Policy Implications in a Medicare Advantage Population. JMCP. 2021;27(5):596-606. doi:10.18553/jmcp.2021.27.5.596
6. Wallace ZS, Harkness T, Fu X, Stone JH, Choi HK, Walensky RP. Treatment Delays Associated with Prior Authorization for Infusible Medications: A Cohort Study. Arthritis Care & Research. 2020;72(11):1543-1549. doi:10.1002/acr.24062
*Though since withdrawn by the Biden Administration, the Centers for Medicare & Medicaid Services (CMS) released a Final Rule in January 2021 which would improve payer-provider interoperability and advance the automation of prior authorization by requiring the use of Application Programming Interfaces (APIs), which would streamline data sharing between payers and providers. The rule would also define data exchange standards (Health Level 7’s Fast Healthcare Interoperability Resources [FHIR]). In addition, The Health Information Technology Advisory Committee (HITAC) recently released its recommendations to the National Coordinator for Health Information Technology (ONC) in response to the latter’s RFI soliciting feedback on electronic prior authorization standards, implementation specifications, and certification criteria that could inform and alter the current ONC Health IT Certification Program. These recommendations address, among other topics, the development of a prior authorization roadmap to FHIR, adoption at scale, and the need for multi-stakeholder engagement.
