Improving the Flow of Prior Authorization for Better Care

By Matt Phillion

Prior authorization is a frequent pain point for both patients and providers. Frustration at delays of care grows as staff try to navigate complex processes and systems for prior authorization.

Organizations like Valer are looking at ways to improve this process to ensure patients receive timely care and clinicians spend less time jumping through administrative hoops to make sure their patients get the treatments they need.

Dr. Steve Kim, founder of Valer, says that it was his own experiences as a pediatric surgeon that led him to want to improve prior authorization processes.

“I was super frustrated, as many providers are, with the manual burden of prior authorizations, the way they grind things to a halt and impact patient care,” says Kim. “We need to do something to better help patients get the care they need.”

His work involved a heavy amount of Medicare and Medicaid patients, Kim notes.

“These are some of the most difficult and challenging requirements,” he says. “I saw a series of bad outcomes that came out of delays, denials, or gaps so the patients were not getting the care they needed, and this caused me to say what is going on here?”

One of Valer’s missions is to simplify and speed up the process so patients can get the care they need when they need it.

“It’s such a massive headache for providers and patients, and we’re at a critical time with regulations where there’s an opportunity to do better for the patients,” he says.

A heavy burden

The pain points for prior authorization is a long list, Kim says.

“It’s like a permission slip,” he says. “You’ve got to put together financial and clinical information and understand the workflow for exchanging information with insurance companies. It’s all still very manual.”

Recent reports and studies have highlighted how much of prior authorization requires a human manually typing information back and forth to other humans. It’s a heavy administrative burden and not designed for efficiency, Kim explains.

“Healthcare is keeping the fax machine alive and well,” he says. “This one of the big root causes for the challenges we see – when it’s such a manual process, when it’s unclear what the rules are, there’s a ton of delays and errors in the back and forth that lead to all those time-consuming efforts to get those permission slips approved.”

Making it more complicated, Kim notes, is the lack of standardization.

“Everyone at the top level feels like the EHR should be able to seamlessly electronically communicate with all the payer portals, but in reality, nothing is standardized,” he says. “Everyone has their own internal workflows both on the provider and payer side. It’s almost like trying to line up translation efforts to make sure it works, and because it’s so broken, we resort to having humans as transcriptionists.”

Prior authorization started out from the right place, Kim says, as a way to protect patients from care that was inappropriate or not safe, but it’s instead become a financial instrument to determine what they’re going to pay for.

“That’s the other tentpole—the lack of transparency or understanding what the rules of the road are for each individual payer,” he says. “It’s not just each health plan, but third parties also have their own rulesets that aren’t always widely available or understood. So it becomes a bit of a  game: What do you actually require us to do? What is in your benefits determination of what is covered? And we need to figure out which puzzle pieces to send over. People figure things out by trial and error, but those are things we shouldn’t have to do.”

The hope, Kim says, is that government regulation will be strengthened to provide clarity so providers can understand what is required for specific insurance companies.

The road to this point

There is a lot of talk about interoperability, Kim notes, but there is a real lack of standards to make interoperability possible.

“Every EHR system, even at the provider level, is built and customized to their own workflows and needs,” he says. “The workflows are tied to their systems and processes, yet there hasn’t been a standard way to transmit all this information electronically. This is why we see people resorting to manual processes. These systems were never designed to talk to each other.”

Kim points out a 2024 CMS Final Rule on interoperability and prior authorizations intended to move prior authorization to a more modern framework.

“CMS said they are going to require health plans make APIs available for prior authorization. But also, providers and health systems are going to have to figure out how to be compliant and that’s really difficult work with so much fragmentation on the provider side to align all these APIs and get them to actually work,” says Kim. “We’ve always been in favor of APIs as a more modern framework but we live in the day to day with providers and their systems and it’s going to be quite a bit of work.”

It comes down to standardization

Valer has been working on standardizing and normalizing the information from different provider systems and then mapping them to other provider systems, taking what is normally done manually to make sure here’s an electronic meeting place.

“We’re optimistic about a future of where this would be able to drive a lot of value, but also very measured and understanding about how complex and fragmented these workflows often are,” Kim says. “There’s a lot of excitement about AI being able to address some of this, but it’s not going to be the magic silver bullet people are hoping for. Standardizing and structuring a network to communicate between systems will allow for future technology to be more impactful and more efficient, putting some of the infrastructure in place to unlock the potential of AI or other technology down the road.”

Healthcare faces unique challenges in this area because it is so fragmented and not standardized.

“Everybody does prior authorizations their own way,” says Kim. “You can imagine, from a safety angle the importance of getting clinical information transmitted across systems. These decisions are being made that can impact people’s lives. You do not want errors or mistakes that would lead to a denial for someone who is waiting for chemotherapy or surgery. We want to set the standard for getting it right and minimizing risk. These are peoples’ lives we’re dealing with.”

As CMS pushes for change, patients also have an opportunity to weigh in as well.

“I think the public has already started speaking up. You see social media full of both physicians and patients voicing their frustrations with prior authorization,” says Kim. “There’s mounting anger. This message has reached CMS and HHS and from a regulation standpoint we’re seeing real, forceful effort to make change.”

Professional organizations are weighing in as well. The 2024 AMA Prior Authorization Physician Survey found that 93% of physicians reported care delays due to prior authorization and 82% reported that prior authorization can potentially lead to treatment abandonment. And in an era when the industry faces an ever-increasing shortage of physicians, 89% reported that prior authorization leads to additional clinician burnout. And more than one in four physicians surveyed said prior authorization had led to a serious adverse event for a patient in their care.

“I don’t know how to further amplify the concern that’s been voiced in so many circles,” Kim says. “This is one of the reasons CMS has said we’ve got to take action. We can no longer wait for incremental change.”

Kim also notes that alongside better efficiency, we also need more transparency with prior authorization.

“Because so much of what happens with prior authorization is manual, it’s not really accounted for very well,” he says. “Insurance companies need to start reporting their approval and denial rates, and how quickly they’re responding to authorization requests.”

Ideally, we are moving toward a process that is much less of an ordeal in terms of getting the right information to the right people to make the right decisions, Kim says. There’s a great deal of work to be done and it requires sensitivity and care need to be taken to get it right, because patient lives hang in the balance.

“We’ve got to step back and look at what’s right for the patient,” says Kim. “These are thorny issues and there are no simple answers, but at the end of the day we have to do what’s right when it comes to the patient.”

Matt Phillion is a freelance writer covering healthcare, cybersecurity, and more. He can be reached at matthew.phillion@gmail.com.