Workflow Tips to Help Manage Prior Authorizations

Prior authorization (PA) refers to the requirement for independent pathology groups and clinical laboratories, and other healthcare providers to obtain approval from insurance companies or payors before they can deliver certain medical services or procedures.

The importance of PAs centers on deciding whether or not treatment paths are approved for patients while taking into account fiscal responsibility. Nonetheless, this process tends to create challenges for both healthcare providers and patients alike.

Current Industry Standards and  Steps Associated with Prior Authorizations

First, a provider determines the need for medical service(s) and/or procedure(s) for a patient, following an evaluation. If the medical service or procedure is not readily covered by the payor, a PA is required:

• Coverage for medical services and procedures varies amongst payors.
• Typically, PA documentation requirements are payor defined and frequently differ between payors.
• Requests can be made via telephone, fax, email, and electronic data interchange.
• The average response time for an initial request is anywhere from 5-10 business days.‍
• Payors respond either with an approval, denial, or request for further information regarding the services or procedures.

Challenges for providers in terms of reimbursement for services rendered along with difficulties for patients related to receiving care are intertwined with PAs as requirements associated with laboratory testing vary between payors, the various plans under payor-umbrellas, and by state. As one might imagine, these hurdles often lead to significant cash flow reduction. 

Decreasing labor allocation and the time needed for preparatory steps in combination with the follow-through process for PAs maximizes workflow efficiency:

• For starters, a workflow should consist of defined aspects in terms of back-end processes, front-end processes, and the ability to identify opportunities.
• Compartmentalization of the processes surrounding PAs, denials, and other similar claim-related transactions allows for the consistent tracking of productivity.
• Standardization of the most common tasks associated with the various workflow aspects can be a deciding factor in overcoming challenges and securing long-term growth for laboratory operations.
• Utilizing lab billing features, like those available within the revenue cycle management (RCM) module of LigoLab Informatics Platform, will help providers eliminate the factors hindering workflow efficiency associated with PAs.
• Specifically, configurable RCM tools and features such as the Specialized Workflow Queues, Rule Engine, Reporting Module, and Account-Based Transaction(s).

Specialized Workflow Queues

Efficiency Opportunity:

• With mounting concerns regarding the administrative burdens, costs, and inefficiencies associated with PAs, the healthcare industry has begun to explore a variety of approaches to reduce PA burdens.
• Professional healthcare entities such as the American Medical Association (AMA) promote an automated PA process utilizing standard electronic transactions to increase uniformity across health plans and streamline workflows.
• Initiatives involving electronic PA systems, standardized protocols, and improved communication between all involved entities are a few ways to mitigate the inefficiency.

Operational Impact:

• Configurable workflow queues such as the ones available in LigoLab Informatics Platform, allow laboratories to effortlessly streamline aspects of their workflows.
• Moreover, these workflow queues can be combined with the platform’s innovative Rule Engine to automate certain workflow aspects.
• The queues are designed for data organization and validation with a focus on preventing claims from being overlooked, creating the opportunity to redirect resources toward more complex processes.

Rule Engine

Efficiency Opportunity:

• In 2021, Medicare Advantage insurers overturned more than 80% of their initial prior authorization denials after they were reconsidered, as a result of the initial requests failing to provide necessary documentation.
• Date & time-stamped PA packages, along with a formalized follow-up process, combined with “tickler” (reminder) files ensure that submission follow-through isn’t neglected. 
• For the 2021 plan year, 114 contracts did not pass the data validation process, including all contracts for Anthem Blue Cross Blue Shield plans.

Learn More: Over 35 Million Prior Authorization Requests Were Submitted to Medicare Advantage Plans in 2021

Operational Impact:

• The Rule Engine allows users to configure operational settings corresponding to a workflow task, data-entity-driven reminders (“ticklers”/”tags”), and data validation without relying on manual intervention.
• Additionally, conditions can be added to the pre-configured rule based on billing workflow triggers causing a data cascade depending on the configuration options.
• Utilizing the combination of a rule with conditions will reduce the instances of PA denials resulting from inaccurate and/or missing data related to the payor documentation requirements.

Reporting Module

Efficiency Opportunity:

• In Experian Health’s State of Claims 2022 survey, 62% of healthcare executives said they lack sufficient data and analytics to identify issues when claims are being submitted.
• Furthermore, the same survey reported that failure to verify provider eligibility and code inaccuracies are two of the top three reasons for denials.

Operational Impact:

LigoLab’s robust Reporting module retrieves both real-time claim-related and analytics data:

• Configurable data-entity filters isolate virtually any type of data that has been a part of processing a transaction.
• Implementing the combination of the Rule Engine and Reporting module within lab billing workflows can help reduce the multi-million dollars in revenue losses reported by 35% of hospitals & health systems during the 2022 fiscal year.

Account Based Transaction(s)

Efficiency Opportunity:

• Payors tend to make changes to prior authorization requirements within the same fiscal year causing delays and sometimes resulting in rejections (here’s an example of notification and requirements from a payor).
• Changes to requirements can vary and in certain cases can be significant, so having a central outline of all the relevant data along with any data modification(s) made to a claim can be the difference between potential rejection(s) vs. efficient processing.

Operational Impact:

Account-Based Transaction(s) link all claim-related data and transactions within a single account, represented via data rows:

• User-friendly and intuitive navigation creates open yet secure access to all claim data within a single user interface, thus significantly improving workflow efficiency.
• Retrieval of relevant data needed in terms of fulfilling payor documentation requirements for either appeal and/or PA packages becomes a standardized process.
• Overall, the importance of transparency, accuracy, and secure access to claim-related data will contribute to a decrease in PA denials, resulting in an increased cash flow.

The Big Picture & Future Laboratory RCM Outlook

Healthcare is a service consistently in demand, yet it can be unpredictable with the COVID-19 Pandemic serving as recent evidence. Therefore, seizing opportunities directed at proactively improving workflow efficiency should be at the top of any laboratory executive’s checklist. 

More specifically, incorporating a lab RCM solution such as the one offered by LigoLab can be the stabilizing factor for a laboratory’s fiscal health and growth potential. Although PAs can play a significant role in workflow inefficiency, they are far from the only factor plaguing laboratory operations in today’s industry landscape. 

Utilizing the features available within the LigoLab’s “single source of truth” informatics platform places laboratories firmly in the driver's seat to streamline, standardize and track workflow processes such as PAs. 

Finally, the RCM tips mentioned in this article can give laboratories the ability to navigate through longer business cycles, around the increasingly stringent payor requirements, and toward sustained long-term growth.

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