When it comes to health plans and prior authorization, medical providers often have a different perspective than their counterparts on the health plan side.

Per the American Medical Association (AMA), 88% of medical providers report prior authorization burden as high or extremely high. One misconception is that prior authorizations exist to make a clinician's job harder or to impede necessary care.

How to help providers love (or at least not hate) preauthorizations

So, Advisory Board asked nurses and medical directors who work in health plan utilization management (UM) departments, "What's something you wish providers in your network knew about your health plan's UM function?"

Here is what they had to say:

1. Prior authorization rules are made by multiple clinicians and other evidence-based sources, not by payer laymen

Plans take utilization management very seriously. It is one of the only tools plans have to make sure their members are receiving safe care. For example, a patient may receive x-rays from multiple locations, but their PCP may be unaware that the patient is reaching risky levels of radiation—however, the plan could know because they receive the prior authorization requests from each location.

Health plans consult the expertise of doctors, nurses, and other experts in the market to develop prior authorization rules. Amongst these consultations are talks with provider executives from partnering hospitals and health systems. Decisions are also made by clinicians who are now employed by the health plan but have years of experience practicing traditional medicine.

For government lines of business, many prior authorization rules come directly from federal Medicare guidelines or state Medicaid guidelines. Plans also leverage data through clinical decision support vendors such as MCG and Milliman to maximize their utilization management efforts and compare their metrics across national and regional statistics.

2. Utilization management isn't used just to determine medical necessity—it's multifunctional

Plan clinicians made it clear that prior authorizations are multifunctional. One purpose of prior authorizations is to check for medical necessity, but they also exist to alert care management, prevent surprise bills, and align with employer benefit packages.

How inpatient utilization will change based on population trends

Prior authorizations alert care managers to upcoming services, allowing health plans to provide proactive care management support and line up additional, necessary services.

Simultaneously, the prior authorization function can ensure members are going to in-network providers, so they're not met with denials or surprise bills afterwards.

It's worth noting that in the employer-sponsored market, the prior authorization process cannot be one-size-fits-all. Different employers, have different benefits packages. As a result, different patients have different prior authorization requirements.

3. There aren't as many prior authorization rules as you think—especially not for time-sensitive care

Clinicians on the provider side, as well as some prominent politicians, have complained about prior authorizations delaying necessary, urgent care. But plan clinicians emphasize that urgent and life-saving procedures do not require prior authorization. Possibly because of this misconception, some providers have waited for an authorization when one wasn't required—as a result, patients may unnecessarily wait for care.

We even heard from one plan that half of the documentation they receive from providers to request prior authorization are for procedures that don't require one in the first place—which is inefficient for provider offices who are already overwhelmed with administrative tasks.

Plans are still working on automating more of their prior authorization requests so that when providers start submitting documentation for a procedure, the provider portal can immediately tell them that one isn't needed so they can go ahead and schedule the procedure.

How plans and providers can partner to improve the prior authorization process

1. Provider offices can switch to digital tools for prior authorization requests, rather than fax, to speed up the process and increase auto-adjudication rates.
2. Provider offices should maintain a cheat sheet of approximate approval times for different payers and schedule services accordingly. For example, scheduling surgeries for a week out rather than the next day if they know that this payer usually takes a week to approve requests.
3. Plans can regularly explain to providers the specifics of what should be included in prior authorization requests for a procedure. Providers express frustration that across multiple plans, they don't know what form or test demonstrates medical necessity, so they end up sending unnecessary or incorrect documentation.
4. Plans should ask for feedback from their provider network for prior authorization rules and for denial exceptions. Even if plans use multiple data sources and in-house clinicians, the clinicians  being asked to follow these guidelines should have a channel to provide input.

Utilization management are one of the more prominent causes of tension between plans and providers—and an area where both parties have vested interest in improving the status quo.

Are you interested in learning more about our research on utilization management?  Email us at needhamc@advisory.com to learn more of our insights and to continue the conversation.