Well-documented payer walls between the "claims side of the house and the care side of the house" are highlighted with prior authorization. A strategy to comply to the final rule issued by the U.S. Centers for Medicare & Medicaid Services suggests that payers should unify organizations and systems around their member longitudinal health record.
What's Important
- Scope the solution. Payers need to decide whether they are just trying to meet the mandates or using the revised PA process as an opportunity to modernize the care management, interoperability, portal, analytics, and customer service aspects of the business.
- Take it slow. A multiyear stepwise approach to modernize the PA process within an overall architecture seems prudent.
Introduction
The U.S. Centers for Medicare & Medicaid Services (CMS) recently finalized a proposed rule designed to speed the electronic exchange of information, streamline the processes related to prior authorization, and improve patient care.
The release of CMS-0057-F by the U.S. Department of Health and Human Services (HHS) in January 2024 means that healthcare payers now must decide whether to simply comply with the new rule or seize this mandate as an opportunity to modernize their transaction and payer/provider handoff infrastructure.
Prior authorization (PA) refers to the process through which a healthcare provider, such as an individual clinician, an acute care hospital, an ambulatory surgical center, or a health clinic, obtains approval from a payer before providing care to a patient. Payers establish PA requirements to help control costs and ensure payment accuracy by verifying that an item or a service is medically necessary, meets coverage criteria and, for some payers, is consistent with standards of care before the item or service is provided. The standard model of PA is a complex, iterative, multistep process that includes multiple systems, providers, internal payer organizations, and faxes.
PA has an important place in the healthcare system, but the process of obtaining it can be challenging for patients, providers, and payers. Dissimilar payer policies, inconsistent use of electronic standards, and other technical barriers have created provider workflow challenges and an environment in which the PA process is a burden for providers and payers, creating a potential health risk for patients if process inefficiencies cause delays in medically necessary care.
Payers are in favor of PA. They recognize the burden but cite the need for proof of medical necessity using evidence-based guidelines, reducing duplication and waste, optimizing costs in a pressurized cost-of-care environment, identifying excessive billing, and identifying candidates for case management. One purpose of prior authorizations is to ensure the patient gets the right therapy. With a comprehensive view of the healthcare system and each patient's medical claims history, health plans have a holistic view and can help ensure that treatment is safe and appropriate. In times of financial stress, payer CFOs have asked chief medical officers to reduce medical service utilization by implementing stricter clinical approval guidelines. The short-term logic was that denying more providers' requests to perform medical services lowers claim costs.
CMS has acted and recently clarified its mandate in response to this practice in the voice of member consumerism.
Key Takeaways
CMS has acted and recently clarified its PA mandate responding to member consumerism:
- Replace and modernize with a goal to comply and beyond.
- Use industrial-strength technology partners with historical experience in FHIR and Da Vinci standards.
- Meet the mandate by ensuring PA metrics transparency can occur before implementing APIs.
- Use the Member-360 as the layer to unify the data and the solution in both the short term and the long term.