Next in Line - Price Transparency and Shared Decision Making

Next in Line - Price Transparency and Shared Decision Making

By: Pam Jodock, senior director, health business solutions, HIMSS North America 

Prior authorization the payer perspective: a process often considered as the bane of a healthcare provider’s existence since time immemorial. Payers argue that it is necessary to help manage healthcare costs and ensure the patient is aware of more cost-effective treatment options that may be just as clinically effective. Prior authorization can also be a valuable tool in reducing over-utilization of high-dollar drugs or procedures, or to guard against fraud.

Prior Authorization – the provider perspective: Providers argue prior authorization is a time-consuming process that delays care and creates a heavy administrative burden. In a 2010 American Medical Association (AMA) survey, physicians reported spending an average of 20 hours per week on prior authorization activities. Six years later, despite technical advancements and the introduction of standard operating rules governing electronic transactions, such as prior authorization, the 2016 version of this same study indicates little has changed.

  • Respondents still report spending an average of 20 hours per week on prior authorization activities.
  • More than a third have staff members who work exclusively on prior authorization requests, with the number of requests submitted each week averaging 36.6.
  • The average wait time for a prior authorization decision is one to three days.
  • 90 percent of respondents indicate this waiting period leads to delays in care.

HIMSS17 Breakfast Panel: This hot topic will be discussed at greater length during a special breakfast session at HIMSS17, an event with no additional cost or separate registration required.

Resolving Prior Authorization Pain Points – A Critical Cross-Stakeholder Conversation

Tuesday, February 21, 2017
7:00am - 8:00am
Room W209B
Orange County Convention Center, Orlando, Fla.

Join us to learn what organizations, such as the AMA, the Healthcare Administrative Technology Association (HATA), and the Workgroup for Electronic Data Interchange (WEDI), are doing about the issue, how they plan to work together going forward, and hear their responses to the questions posed above. It should be a lively and informative session.

Register for HIMSS17.

Although multiple efforts continue to address these issues, none has had a significant impact on reducing the administrative burden associated with prior authorizations or the cost.

According to the 2013 U.S. Health Care Efficiency Index published by CAQH/CORE, the cost of prior authorizations at that time ranged from $3.95 per transaction for health plans to $18.53 per transaction for providers.

Prior authorization – time to rethink the strategy: The rise in consumerism in healthcare and emergence of payment methodologies that focus more on the quality of care delivered than the quantity have me wondering if this might be an opportune time for the health plans to rethink their prior authorization strategy.

  • Transparent pricing and shared decision models would ensure that patients have access to information about less expensive, equally effective courses of treatment, relieving payers of that paternalistic burden.
  • Shared financial risks and episode of care, or bundled payment arrangements, encourage physicians to recommend the most cost-effective treatment.

Prior authorization - for fraud purposes only: These changing dynamics eliminate two of the main reasons insurance carriers cite for using prior authorization. One could argue that prior authorization is still needed to protect against fraud. Using prior authorization for fraud detection/prevention only would:

  • reduce the number of procedures requiring prior authorization, saving providers and payers alike hundreds of hours of work over the year
  • reduce the administrative and cost burden.
  • improve access to care

As for prior authorization, what do you think?

Has the time come to reconsider our approach to prior authorization?

What might the advantages and disadvantages of such an approach be?


in health and IT meet.