4 Shocking Prior Authorization Stats You Should Know

April 19, 2022

Prior Authorization is a critical process in the entire revenue cycle of any healthcare practice. It is essentially a process where insurance companies approve or deny claims before they pay out benefits. Simple as it may seem, prior authorization is not without its share of some alarming caveats. Let’s take a closer look at 4 of them.

Shocking Prior Authorization Facts

1. In spite of the growing prevalence of electronic prior authorization, a large number of healthcare providers continue to follow the traditional modus operand involving making phone calls, sending out faxes and submitting paper-based PA requests. Did you know that the average time a healthcare practice spends in trying to reach a customer service representative in an insurance company, including hold times, is 20+ minutes? In fact, a single PA submission can take anywhere between 30 to 45 minutes to be completed. 

2. A study conducted in 2009 revealed that on an average, the time spent on making prior authorization requests in a week equaled about 20 hours’ worth of medical practice. This takes into account one hour of the doctor’s time, approximately 6 hours of clerical time and 13 hours of nurses’ time.

3. Depending on the complexity of the prior authorization request, the level of manual work involve, and the requirements mandated by the payor, a prior authorization request can take anywhere from one day to a month to process. The 2018 American Medical Association (AMA) Prior Authorization Physician Survey revealed that 26% of providers report waiting for 3 days or more for a prior auth decision from health plans.

4. Love it or hate it, prior authorization is not going away anytime soon. The American Medical Association (AMA) has projected that use of prior authorization for prescription drugs will increase 20% per year. 

The final word

As you still struggle to recover from the shock that the facts above have obviously subjected you to, let me also remind you of the many benefits that outsourced PA continues to provide. According to one source, outsourcing can lead to a 30% to 40% reduction in operational costs. It also saves you from having to learn about the ever-changing norms of different payors or maintaining compliance and other such issues. Additionally, besides reduction in operational costs and letting you take advantage from an improved workflow, professional and dedicated intervention in your PA tasks can help in freeing up your resources and leave your practice with more time to spend on actual patient care and growing your business. 

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