Why Are Prior Authorizations So Manual?

So why are prior authorizations so manual?  Whether it’s the joy of filling out paper fax forms, the carpal-tunnel-inducing manual entry of data into payer web portals, or being on endless hold on the phone, prior authorizations today remain the bane of most practices:

• The American Medical Association estimated that $31 billion is spent annually on prior authorizations by providers.
• The Kaiser Family Foundation estimated 868.4 million hours are spent annually obtaining prior authorizations.
• According to Milliman, manual prior authorizations cost $10.78 per transaction vs. $2.07 for an electronic transaction.  That’s $8.71 in savings per electronic transaction.

So one would think that in this day and age, prior authorization transactions should be as easy as paying bills on your smartphone.  Guess again.  So why are prior authorizations still stuck in the world of 1980’s fax tones?

1. Like politics, all healthcare is local.  Each geography has its own unique mix of providers, payers, and plans.  What that means, is that it is impossible to have any semblance of standardized workflows.  Each payer has its own fax form or clunky home-grown web portal that maps to its own internal workflows.
2. Local business requirements are always changing.  There are constantly changing forms or payer web portals.  Keeping up with changes in today’s EHRs or practice management systems is impossible.  (How fast does your EHR vendor make changes? months? years? at all?)  Remember, these systems were never designed to manage change at the pace of the real world.
3. Everyone has their own system. None talk to each other today.   Whether it’s siloed provider EHRs or ancient payer systems, none meaningfully transacts electronic data with all their business partners.   It’s hard enough to get Cerner systems to talk to each other, let alone with say an Epic, Allscripts, or NextGen EHR.  And don’t even think about interoperating with a DOS payer system.   So, all healthcare is local, local business requirements are constantly changing, and none of our systems talk to each other.  What you get is $31 billion of last-mile workarounds to get anything done.

We pay people to transcribe data on paper fax and type data into outdated systems.   This. Is. Insane.  As a physician working in the trenches, this is appalling and offensive. This is why we have spent years studying the prior authorization problem. This is why Valer delivers automation today for prior authorizations, referrals, and eligibility.