The patient’s journey to navigating the healthcare system can get cumbersome, adding an additional layer of frustration due to the lack of prior authorization (PA). A broken system can further delay critical care and add unnecessary stress to a patient’s already challenging healthcare journey.
PA, also known as Prior Auth, was introduced in the mid-20th century as a way to control healthcare expenses and ensure that the provided services are necessary and financially sustainable. However, over the years, prior authorization has been associated with:
- Frequent delays
- Increasing complexities
- Excessive administrative burdens
All these listed challenges hinder the improvement of care efficiency. With the expansion of Medicare Advantage (MA), Medicare Advantage Prescription Drug (MAPD), and Prescription Drug Plans (PDPs) under Medicare Part D, the complications associated with PA have escalated in magnitude as stricter requirements often delay timely care delivery.
Tracing the Development of Prior Authorization
PA gained traction as a strategic enabler for managing soaring healthcare spends and became a focal point for businesses with the introduction of MA plans, aimed at minimizing expenses. As MA plans expanded across 50 states, the scope of PA broadened, resulting in a system that often prioritizes spend containment over clinical care.
Let’s look at some examples that illustrate this trend:
- Medicare Advantage and Part D plans now require PA for routine services, such as diagnostic imaging, specialty medications, and rehabilitation services, increasing administrative demands on providers
- The Centers for Medicare & Medicaid Services (CMS) regulations have introduced further layers of complexities by mandating transparency and timelines for PA decisions, which many payers struggle to meet
In January 2024, Centers for Medicare & Medicaid Services (CMS) advised MA plans to provide decisions within specific timeframes – 72 hours for expedited requests and seven calendar days for standard requests – from 2026 onwards. This rule is expected to minimize the overall administrative burden, empower clinicians to spend more time providing direct care to their patients and prevent avoidable delays in care for patients.
The Current Impact of Prior Authorization
Let’s understand in detail how PA impacts various stakeholders in the healthcare ecosystem.
Patients
- Care Delays: A Medicare Advantage member waiting for MRI approval to diagnose cancer may face life-threatening delays
- Reduced Trust: Frequent denials or delays can undermine patients’ confidence in the healthcare system
- Financial Stress: Extended delays can translate into a higher out-of-pocket cost as health conditions deteriorate
- 94% of physicians reported that prior authorization delays access to necessary care
- More than three-fourth of physicians (78%) reported that patients abandon treatment due to authorization struggles with health plans
Source: AMA Survey Results
More than a third (37%) of patients whose problems included prior authorization said they had to pay more out of pocket for care
Source: KFF 2024 Survey
Providers
- Administrative Overload: Healthcare professionals often dedicate their time to documenting the frequently changing PA rules for each payer, detracting their focus on patient care
- Undermined Judgment: Questioning medical decisions can get frustrating and strain the doctor-patient relationship
The 2023 AMA report found that physicians and their staff spend an average of nearly 12 hours completing PAs, deviating from the time meant for patient care.
Payers
- Inefficiencies and Expenses: Manual workflows in PA processing slow down the outcome, resulting in dissatisfied members and inefficient operations
- Regulatory Challenges: Payers continually face challenges in meeting the CMS guidelines for transparency and timely decision-making
Newgen’s 2025 healthcare trend report attributed the CMS rule that requires MA plans, Medicaid plans, and other federally funded payers to implement FHIR-based APIs to improve the electronic exchange of healthcare data while expediting prior authorization processes.
Exploring Use Cases and Real-world Challenges of Prior Authorization
1. Diagnostic Imaging
Scenario: A 68-year-old MA member need a CT scan to assess suspected internal bleeding
Challenge: Any delay in approval will result in prolonged suffering and potentially missed critical interventions
2. Specialty Medications
Scenario: A Medicare Part D enrollee with rheumatoid arthritis needs biologic medication. The payer demands trial-and-failure with cheaper alternatives before approving the request
Challenge: Treatment delays may result in unnecessary pain and deterioration of the patient’s condition
3. Rehabilitation Services
Scenario: After a stroke, a senior patient is prescribed rehabilitation sessions. PA requirements cause a two-week delay
Challenge: The delay can hamper recovery and increase the risk of long-term disability
4. Home Healthcare
Scenario: An elderly patient with diabetes requires home wound care. The PA process takes 10 days
Impact: The delay may lead to an infection, requiring hospitalization and driving up the costs.
Optimizing Prior Authorization with AI-enabled Technology
Revamping the complex world of PA is a must and technology is the way forward. Introducing NewgenONE—a low-code-based unified platform—offers an integrated all-in-one solution designed specifically for the US healthcare system.
Some key benefits include:
1. End-to-end Workflow Automation
- Intelligent Process Automation (aka Newgen’s Business Process Management Platform) automates workflows, enabling faster approvals for routine requests, such as diagnostic imaging or rehabilitation services
2. Document Management
- Contextual Content Services (aka Newgen’s Enterprise Content Management Platform) digitizes and centralizes all PA-related documents, ensuring secure and streamlined data access
3. Timely, Relevant, and Transparent Communication
- Omnichannel Customer Engagement (aka Newgen’s Customer Communication Management Platform) provides timely updates to Medicare beneficiaries about their PA status, fostering trust and satisfaction
4. AI-powered Decision Support
- AI examines patient history and clinical guidelines to automatically approve low-risk PA requests, reducing manual intervention
- Predictive analytics help identify and address bottlenecks, ensuring adherence to CMS timelines
5. Seamless Data Interoperability
- Integration with Electronic Health Records smoothens the process of sharing patient data in real time, making it easier for payers to make faster and informed business decisions
6. Regulatory Compliance
- Provider Lifecycle Management (PLM) Solution helps ensure up-to-date provider data, minimizing credentialing-related delays
- Complaints, Appeals, and Grievances (CAG) Suite expedites end-to-end case management and helps deliver prompt resolutions
By automating workflows, leveraging artificial intelligence, and enhancing communication, Newgen empowers payers and providers to focus on providing high-quality, timely care. The low-code NewgenONE platform transforms PA into a streamlined, efficient, and transparent process to deliver patient care efficiently. By leveraging the platform:
- Patients get care without unnecessary delays
- Providers can prioritize clinical decision-making by spending their time and bandwidth on administrative tasks
- Payers achieve operational efficiency while complying with CMS mandates
What Next?
Discuss your prior authorization challenges with our subject matter experts and grab your winning strategy today!
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