The Impact of Prior Authorizations on Claims Payment Accuracy

The purpose of a prior authorizations (PA) is to aid health plans in the management of care to their members, ensuring patient safety and validating the medical necessity of services, while also overseeing the cost of care. Having an efficient and accurate process to manage PAs can impact multiple aspects of a health plan’s business including enhanced member care, utilization management, provider relations, and claim payment accuracy.

Providers often find the PA process to be tedious and time consuming due to the lack of information and transparency into a payer’s PA requirements. As each payer has different PA guidelines, if not clearly documented and communicated, providers tend to cover their risks by over-submitting PA requests, which leads to additional administrative burden for both sides and can ultimately impact a member’s care.

There are both process and configuration opportunities on which health plans can focus to further improve the PA experience, manage utilization, and control costs.

One of the most important aspects of an effective PA process is to actively manage and regularly review PA guidelines to stay up to date on regulatory requirements and best practices within the market. It is important to share updates with external parties like providers and members; however, it is equally important to share changes with internal parties that facilitate the interface of the PA and claims adjudication systems in order to ensure payments are made only for properly authorized services and only up to the authorized service limitations.