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Top 5 Reasons Payers Don't Automate Prior Authorization

Analysis  |  By Jay Asser  
   December 02, 2022

A survey of health plans finds prior authorization processes need improvement to become fully electronic.

While the healthcare industry is moving towards automation as a whole, prior authorization (PA) still has plenty of room for growth.

An industry-wide survey conducted by America's Health Insurance Plans (AHIP) fielded responses from 26 health plans covering 122 million commercial enrollees from February to April to better understand PA practices from the perspective of payers.

The survey revealed the top barriers to prior authorization automation for insurers, which were led by providers not using electronic health records (EHR) enabled for electronic PA and the high costs to upgrade EHR.

The top five reasons were:

  1. Provider does not use EHR enabled for electronic PA (71%)
  2. Costly/burdensome for providers to buy/upgrade HER for electronic PA (71%)
  3. Lack of interoperability between EHR vendors (62%)
  4. Costly/burdensome for payers to enable PA rules and information to be delivered electronically (43%)
  5. Lack of electronic PA solutions on market (19%)

Payers reported that a significant percentage of PA requests continue to be submitted manually by providers. The breakdown for prescription medications was 61% electronic and 39% manual, while medical services were 60% manual and 40% electronic.

The use of electronic PA was the most chosen method of streamlining PA for respondents, with 88% automating medical services and 75% automating prescription medications.

On the other side, many providers feel the burden of prior authorization still falls on them.

A survey by the American Medical Association (AMA) revealed that physicians feel payers are not upholding a 2018 voluntary agreement on PA reforms between them, the AMA and other national organizations.

Only 26% of the responding physicians reported that their electronic health record system offers electronic prior authorization for prescriptions.

Jay Asser is the contributing editor for strategy at HealthLeaders. 

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