Providers

How Prior Auth “hops” impact care (no, this has nothing to do with bunnies or beer)

Syam Palakurthy

Syam Palakurthy

CEO, CoFounder

Recently the COO of a practice asked about the impact of prior auth-related back-and-forth communication with payers. This COO intuited that back-and-forth communication gums up practice operations and impacts patient care, but was curious to know if that intuition lined up with our data.

To evaluate the question, we looked at what we call “hops”: the number of extra times the PA request “hops” back and forth between the provider and the payer before getting approved or denied. If the payer approves the response right away, then that involves zero hops; if there’s one extra round of back-and-forth before the provider sets the final status, that’s one hop; if there are two rounds of back-and-forth, that’s two hops; and so on. Everyone (including the payer, in my opinion [1]) wants to minimize these back-and-forth communications. At an intuitive level, one would expect more ‘hops’ to decrease Approval Percentage Prior to Date of Service and slow down time to treatment, but does that bear out in the data, and if so, how much of an impact does it have?

We measured the impact with a metric we think about a lot — Approval Percentage Prior to Date of Service. As I discussed in this article, even PAs that eventually get approved can have a detrimental impact to patients. Would the number of hops related to a PA request affect the Approval Percentage Prior to Date of Service?

As the number of "hops" back and forth with payer increases, the likelihood of the request being approved prior to the intended date of service decreases.

The answer is yes, and by quite a bit. In the case where the PA gets resolved on the initial request, 83% are approved prior to the intended date of service. That’s not great, as it means nearly a fifth of responses don’t get approved in time. But it quickly gets worse: with one or two hops, the percentage tumbles to ~50% Approved Prior to DoS [2]. With three or more hops, it falls off a cliff to ~30% — as in, only 30% of prior authorizations get an approval by or before the expected date of service for the patient. The takeaway is that a single extra hop makes it likely the PA process will impede the patient’s care.

That raises two important questions: what causes those extra hops, and what can be done about them? Both questions warrant their own detailed articles, but the summary to the first question is that most unnecessary hops are caused by addressable non-clinical issues, such as missing information in the request, changes to the patient’s coverage, or the request needing to go to a unique carve-out plan. Most non-approvals come from errors that slip into the incredibly complex process of running a specialty clinic, not from clinically-appropriate requests. It’s frustrating that administrative issues related to the convoluted payer process demonstrably impact patient care. The silver lining, however, is that practices — if equipped with the right tools and processes — can markedly reduce the impact that prior authorizations have on the patient experience.

Notes

  1. My father, a retired physician with over 30 years in practice, believes that payers are happy to inflict as much pain on providers as possible to discourage utilization. Based on dozens of conversations with payer executives, I disagree and believe they find this back-and-forth undesirable and operationally expensive; but if you’re like my dad, I may never convince you otherwise. In any case, the outcome is identical regardless of who is right.
  2. Interestingly, it doesn’t matter if it’s one or two hops — in both cases the Percentage Approved Prior to DoS hovers at around 50%.

Providers

How Prior Auth “hops” impact care (no, this has nothing to do with bunnies or beer)

Syam Palakurthy

Syam Palakurthy

CEO, CoFounder

Recently the COO of a practice asked about the impact of prior auth-related back-and-forth communication with payers. This COO intuited that back-and-forth communication gums up practice operations and impacts patient care, but was curious to know if that intuition lined up with our data.

To evaluate the question, we looked at what we call “hops”: the number of extra times the PA request “hops” back and forth between the provider and the payer before getting approved or denied. If the payer approves the response right away, then that involves zero hops; if there’s one extra round of back-and-forth before the provider sets the final status, that’s one hop; if there are two rounds of back-and-forth, that’s two hops; and so on. Everyone (including the payer, in my opinion [1]) wants to minimize these back-and-forth communications. At an intuitive level, one would expect more ‘hops’ to decrease Approval Percentage Prior to Date of Service and slow down time to treatment, but does that bear out in the data, and if so, how much of an impact does it have?

We measured the impact with a metric we think about a lot — Approval Percentage Prior to Date of Service. As I discussed in this article, even PAs that eventually get approved can have a detrimental impact to patients. Would the number of hops related to a PA request affect the Approval Percentage Prior to Date of Service?

As the number of "hops" back and forth with payer increases, the likelihood of the request being approved prior to the intended date of service decreases.

The answer is yes, and by quite a bit. In the case where the PA gets resolved on the initial request, 83% are approved prior to the intended date of service. That’s not great, as it means nearly a fifth of responses don’t get approved in time. But it quickly gets worse: with one or two hops, the percentage tumbles to ~50% Approved Prior to DoS [2]. With three or more hops, it falls off a cliff to ~30% — as in, only 30% of prior authorizations get an approval by or before the expected date of service for the patient. The takeaway is that a single extra hop makes it likely the PA process will impede the patient’s care.

That raises two important questions: what causes those extra hops, and what can be done about them? Both questions warrant their own detailed articles, but the summary to the first question is that most unnecessary hops are caused by addressable non-clinical issues, such as missing information in the request, changes to the patient’s coverage, or the request needing to go to a unique carve-out plan. Most non-approvals come from errors that slip into the incredibly complex process of running a specialty clinic, not from clinically-appropriate requests. It’s frustrating that administrative issues related to the convoluted payer process demonstrably impact patient care. The silver lining, however, is that practices — if equipped with the right tools and processes — can markedly reduce the impact that prior authorizations have on the patient experience.

Notes

  1. My father, a retired physician with over 30 years in practice, believes that payers are happy to inflict as much pain on providers as possible to discourage utilization. Based on dozens of conversations with payer executives, I disagree and believe they find this back-and-forth undesirable and operationally expensive; but if you’re like my dad, I may never convince you otherwise. In any case, the outcome is identical regardless of who is right.
  2. Interestingly, it doesn’t matter if it’s one or two hops — in both cases the Percentage Approved Prior to DoS hovers at around 50%.