Workflow Tips to Help Manage Prior Authorization Requirements

Prior authorization (PA) refers to the independent pathology group and clinical laboratory process of obtaining approval from an insurance company or payer before delivering certain medical services or procedures.

Prior authorization centers on deciding whether or not treatment paths are approved for patients while accounting for fiscal responsibility. 

Unfortunately, as you’ll soon see, the process creates laboratory billing challenges for medical labs, other healthcare providers, and patients.

Current Industry Standards and  the Steps Associated with Prior Authorization

A provider begins by conducting a patient medical evaluation to assess the necessity of medical services and procedures with an understanding that if the service or procedure isn’t readily covered by the payer, prior authorization will be needed. 

Beyond this high-level understanding, here are other points to consider when dealing with prior authorization.

• Coverage for medical services and procedures varies amongst payers.
• Typically, prior authorization documentation requirements are payer-defined and frequently differ between payers.
• Requests can be made via telephone, fax, email, and electronic data interchange.
• The average response time for an initial request is 5-10 business days.‍
• Payers respond with an approval, denial, or request for further information regarding the services or procedures.

Provider reimbursement challenges for services rendered and difficulties for patients receiving the care they need are fully intertwined with prior authorization. That’s because laboratory testing requirements vary between payers, the various plans under payer-umbrellas, and by state. 

These hurdles often lead to laboratory revenue cycle management (lab RCM) bottlenecks and significant cash flow reduction. 

So what can be done to improve the situation and help remove the bottleneck?

Decreasing labor allocation and the time needed for preparatory steps in combination with a follow-through laboratory workflow management process for prior authorization maximizes workflow efficiency:

• For starters, a lab workflow should consist of defined aspects for back-end processes, front-end processes, and the ability to identify opportunities.
• Compartmentalization of the processes surrounding prior authorization, denials, and other similar claim-related transactions creates consistent productivity tracking.
• Standardization for common tasks associated with various lab workflow aspects can be a deciding factor in overcoming challenges and securing long-term growth for laboratory operations (and lab RCM).
• Utilizing laboratory billing features, like those available within the lab revenue cycle management module of the all-in-one LigoLab medical LIS and lab RCM informatics platform, will help providers eliminate the factors hindering prior authorization workflow efficiency.
• Specifically, configurable lab RCM tools and laboratory billing features such as Specialized Workflow Queues, the Rule Engine, the Reporting Module, and Account-Based Transactions smooth out the prior authorization lab workflow.

Learn More: The LigoLab Difference: Demonstrating the Power of Lab RCM Automation in the Clinical Laboratory

Specialized Lab Billing Workflow Queues

Efficiency Opportunity:

• With mounting concerns regarding the administrative burdens, costs, and inefficiencies associated with prior authorization, the healthcare industry has begun exploring new lab billing approaches to reduce these burdens.
• Professional healthcare entities like the American Medical Association (AMA) promote an automated prior authorization laboratory billing process utilizing standard electronic transactions to increase uniformity across health plans and streamline workflows.
• Initiatives involving electronic prior authorization systems, standardized protocols, and improved communication between all involved entities are a few more ways to mitigate the inefficiency.

Operational Impact:

• Configurable lab billing workflow queues such as the ones available in the LigoLab Informatics Platform enable laboratories to streamline aspects of their workflows effortlessly.
• Moreover, these workflow queues can be combined with the platform’s innovative Rule Engine to automate certain workflow aspects.
• The queues are designed for data organization and validation while focusing on preventing claims from being overlooked, creating the opportunity to redirect resources toward more complex lab RCM processes.

LigoLab’s Rule Engine

Efficiency Opportunity:

• In 2021, Medicare Advantage insurers overturned more than 80 percent of their initial prior authorization denials after they were reconsidered with the necessary documentation.
• Date and time-stamped prior authorization packages, along with a formalized follow-up process, combined with “tickler” (reminder) files ensure that submission follow-through isn’t neglected. 
• For the 2021 plan year, 114 contracts failed to pass the data validation process including all contracts for Anthem Blue Cross Blue Shield plans.

Learn More: Over 35 Million Prior Authorization Requests Were Submitted to Medicare Advantage Plans in 2021

Operational Impact:

• The Rule Engine allows users to configure operational settings corresponding to a lab billing workflow task, data-entity-driven reminders (“ticklers”/”tags”), and data validation without relying on manual intervention.
• Additionally, conditions can be added to the preconfigured rule based on lab billing workflow triggers causing a data cascade depending on the configuration options.
• The combination of these conditions will reduce the instances of prior authorization denials resulting from inaccurate and missing data related to the payer documentation requirements.

LigoLab’s Reporting Module

Efficiency Opportunity:

• In Experian Health’s State of Claims 2022 survey, 62 percent of healthcare executives said they lack sufficient data and analytics to identify issues as lab billing claims are submitted.
• Furthermore, the same survey reported that failure to verify provider eligibility and code inaccuracies are two of the top three reasons for denials.

Operational Impact:

LigoLab’s robust Reporting module retrieves real-time claim-related and analytics data:

• Configurable data-entity filters isolate virtually any type of data that has been a part of processing a laboratory billing transaction.
• Implementing the combination of the Rule Engine and Reporting module within lab billing workflows can help reduce the multi-million dollars in revenue losses reported by 35 percent of hospitals and health systems during the 2022 fiscal year.

Account Based Transactions

Efficiency Opportunity:

• Payers tend to make changes to prior authorization requirements within the same fiscal year causing delays and sometimes resulting in rejections (here’s an example of notification and requirements from a payer).
• Changes to requirements can vary and in certain cases can be significant, so having a central outline of all the relevant data along with any data modifications made to a claim can be the difference between potential rejections vs. efficient processing.

Operational Impact:

Account-based transactions link all claim-related data and transactions within a single account, represented via data rows:

• User-friendly and intuitive navigation creates open yet secure access to all claim data within a single user interface, thus significantly improving laboratory workflow management efficiency.
• Retrieval of relevant data needed in terms of fulfilling payer documentation requirements for either appeal or prior authorization packages becomes a standardized laboratory billing process.
• Overall, the importance of transparency, accuracy, and secure access to claim-related data contributes to a decrease in prior authorization denials, resulting in an increased cash flow.

The Future of Laboratory Revenue Cycle Management

Healthcare is a service consistently in demand, yet it can be unpredictable with the COVID-19 Pandemic serving as recent evidence. Therefore, seizing opportunities that proactively improve laboratory workflow management efficiency should be at the top of any laboratory executive’s checklist. 

More specifically, incorporating laboratory billing solutions such as the one offered by LigoLab can serve as a stabilizing factor directly impacting a laboratory’s fiscal health and growth potential. 

Although prior authorization can significantly hamper lab workflow inefficiency, it is far from the only factor plaguing laboratory operations in today’s industry landscape. 

Utilizing the lab RCM features available within LigoLab’s “single source of truth” informatics platform puts laboratories firmly in the driver's seat to streamline, standardize and track workflow processes such as prior authorization 

Finally, the RCM cycle tips mentioned in this article can help clinical laboratories and pathology practices navigate longer business cycles, around the increasingly stringent payer requirements, and toward sustained long-term growth.

Learn More: Maximizing Your Lab’s Profitability: The Case for In-House Lab Billing

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