The COVID-19 pandemic is changing the way healthcare does business – sometimes in temporary ways, sometimes in ways that may suggest permanent change when the crisis has passed.
Prior authorizations are one aspect of healthcare delivery that have been altered. Many insurers are waiving prior authorizations for diagnostic tests and covered services for COVID-19.
But frustrations still abound. Insurers increasingly require pre-approval, said David Shelton, CEO of patient access and advocacy solutions provider PatientMatters. This puts the onus on providers to obtain prior authorization for medical services – but that doesn't necessarily guarantee the insurer will end up paying, and patients are often burdened with denied claims.
Specifically, Shelton addressed prior authorization for procedures or surgeries, not for medications. Traditionally, prior authorizations were only required for expensive, elective or new procedures. Patients are legally on the hook for bills if insurers refuse to pay for a preauthorized service.
Some insurers may be unaware of the downstream effect prior authorizations are having, but it's still an ongoing problem for providers who must bear the additional cost and time of getting the approvals. Part of the problem for insurers is that healthcare costs are growing exponentially. Payers are understandably looking for ways to cut down costs, and prior-authorization requirements are one way to do that.
One factor that makes this a potentially thorny issue is that, with more procedures and drugs requiring prior authorization, the patient or the provider now needs to get the OK from the insurer, giving the latter more control over care.
"The most challenging part of the process is the time delays and the costs that have gone along with it," said David Shelton, CEO of PatientMatters. "Prior authorizations can cost the provider $11 each time and take 27 minutes to complete. When you consider most paid services require prior authorization, this can cause an increase in costs and burdens in care. Sometimes physicians feel the payer is dictating the care patients receive."
To be clear, that's not an indictment of the payer industry, he said; rather, due to the sometimes siloed nature of healthcare delivery in the U.S., many payers may have a blind spot when it comes to the frustrations prior authorizations can cause for patients and providers.
The COVID-19 coronavirus situation is changing the picture in some ways. These changes may be temporary or permanent, but either way they're casting a spotlight on the issue.
Some payers are tackling the issue themselves. Earlier this month, for example, Humana said it was expanding its policy of suspending prior authorization and referral requirements, instead requesting notification within 24 hours of inpatient and outpatient care. This is applicable for all providers regardless of network affiliation for patient care related to COVID-19, and for in-network providers for patient care not directly related to COVID-19. Exceptions include transplant and genetic procedures, as well as pharmacy coverage.
Humana said it is taking these actions to help ease financial concerns and give administrative relief for the healthcare-provider community, as well as free up hospital beds by reducing delays in getting inpatients to post-acute care.
In other cases, states and government agencies are taking the lead in temporarily changing policies relating to elective surgeries. Yet because of this state-by-state approach there has been some confusion.
"All the states are behaving differently," said Shelton. "The challenges long-term are, what are the effects of COVID-19 on health, and what will the lingering long-term impacts be as the health issues continue to resolve? Each state has done things differently, and because of that, it's added a layer of ambiguity."
Individual state responses provide a window into how different geographic areas are handling the issue. In Arkansas, for example, the Department of Health stipulated that procedures, testing and office visits that can be safely postponed will be rescheduled to a later date. Emergent and urgent care are exempt from the mandate, and exceptions can be made in a number of circumstances, such as cases where a patient's life is threatened by not having a procedure, or if there is a risk that a patient's condition will rapidly deteriorate.
In Florida, an executive order issued on March 20 decreed that all healthcare facilities, from hospitals to ambulatory surgical centers and dentists' offices, are prohibited from providing medically unnecessary, non-urgent or non-emergency procedures or surgeries. Oklahoma has similar rules in place due to an April 15 executive order amendment, though that state resumed elective surgeries on April 24.
Washington and Texas also postponed elective surgeries, though Texas' restrictions were slated to be lifted on April 22.
"We're encouraging providers to follow all the prior authorization rules they were following before COVID-19, so they engage the payers," said Shelton. "It helps protect the patient from surprise billing. The surprise billing piece is going to be lurking in the background as payers and states get a grasp of how this is going to unfold going forward."
With the uncertainty over which changes will be permanent and which will revert back to normal, Shelton said providers should be investing in technology that can provide results with the least amount of manual data entry. He described prior authorization as a three-legged stool encompassing ICD-10 codes, automated submission with minimal human participation and the retrieval process. The right tool can reduce the time and steps that are required.
"Where it gets engaging for the provider is this: Whenever you move from the web portals to fully electronic transactions, you can reduce costs to about $4 per transaction, and they take two minutes," said Shelton.
Until such technology becomes more widely used, the easing of prior authorization rules have given providers some much-needed breathing room as they hunker down on the front lines of the fight. Perhaps things will return to normal. Perhaps they won't, and if lasting change happens, it may not be all bad.
"Prior authorization claims grew by over 20% from 2018 to 2019," said Shelton. "We can expect those numbers to continue to grow, and it will still be deeply entrenched in our overall work ethic. Providers will need to adapt, and make it a necessary office function.
"Sometimes healthcare is slow to move, and the virus is forcing us to move much more quickly," he said. "I think you'll see payers and providers coming together to recognize there's value to the patient. If the costs are under control I think there are some opportunities for improvements in the system."