According to a survey by Kaufman Hall, 75% of healthcare leaders say the COVID-19 pandemic has had an adverse impact on their revenue cycle, including increased payer denials and an increase in bad debt.1 Some of the impacts, however, were challenges even before the pandemic. Denials are a prime example. The American Hospital Association reports that 89% of hospitals and health systems have seen an increase in denied claims.2
When approvals are delayed because of issues with authorization, patients have to wait to get the care they need, which can lead to poorer clinical outcomes.
While there are many reasons a claim can be denied, issues with authorizations are one of the most common.3 The entire process of managing prior authorizations is manual, prone to error, and time-consuming. Just staying on top of each payer’s unique requirements—requirements that are increasingly complex and often change without notice—is extremely challenging. It’s also a huge burden for physicians who are already being asked to do more with less.
By automating prior authorization transactions, providers and health plans could save $437 million each year.
The average physician completes 41 prior authorizations each week.4 Since the average prior authorization takes 19 minutes, that’s nearly 13 hours a week that the physician is spending on paperwork instead of engaging with patients.5 According to the 2021 CAQH, providers could save 16 minutes per authorization if automated.6 That’s a savings of almost 11 hours a week.
By automating prior authorization transactions, providers and health plans could save $437 million each year.7
But the problem with authorizations goes beyond delayed or denied reimbursement. When approvals are delayed because of issues with authorization, patients have to wait to get the care they need, which can lead to poorer clinical outcomes.
In a survey by the American Medical Association, 91% of physicians said prior authorizations have a “somewhat” or “significant” negative impact on outcomes.8 And those outcomes can be devastating; 34% said a delayed prior authorization has led to a serious adverse event for one of their patients; 24% said it has led to hospitalization, and 18% said it has led to a life-threatening event or the need for intervention to prevent permanent damage.9
Even when a patient’s life isn’t on the line, multiple rounds of canceled or rescheduled procedures can be frustrating for patients, can inhibit patient satisfaction, and harm the patient-provider relationship.