Smart Electronic Prior Authorization as a Gateway to Care Management
Why is prior authorization even necessary?
Utilization Management, and specifically prior authorization, is one technique to limit excessive and unnecessary consumption of limited healthcare resources. Even when a service is “covered” by an insurer, the patient still has a financial responsibility.
The provider is also educated in the process, knowing what is necessary and appropriate in similar situations, thus improving the quality of health care and patient experience. Often, providers who regularly demonstrate knowledge of, and adherence to, the evidence-based guidelines receive “gold card” status from the payer and are exempted from the process.
Prior authorization is also an expensive process for healthcare insurers. Aside from the regulatory obligations, reporting and audits, the transactional costs of prior authorization are significant. When up to 90% of all prior authorization requests are ultimately approved, the associated costs, delays, and abrasion are of dubious value (AMA, 2021).