This is part 1 of a three-part series on how to improve the prior authorization process. This part covers the impact of prior authorization, part 2 explains why they are necessary, and part 3 reviews the steps you can take to make prior authorizations easier.
Independent practices today face numerous challenges – one of the largest being prior authorizations. Most doctors have had negative experiences associated with this process between its ever-increasing administrative burden, strain on practice operations, or negative impacts on patients. And the numbers don’t lie – here are the prior authorization statistics all doctors should know.
Prior Authorization Statistics: Practice Impacts
Prior authorizations are more than just a day-to-day challenge. This administrative burden chips away at your time and profits.
Increased administrative burden. Every procedure that requires prior authorization entails proper paperwork that must be completed, reviewed, and submitted—not to mention the follow-up phone calls and additional work of managing the denials.
The average physician practice completes45 prior authorizations per physician per week, with doctors and staff spending nearly two business days a week completing such authorizations.
Denial of routine items and services. Even specialty practices that submit nearly identical authorizations are routinely denied for various unknown reasons, driving additional administrative churn.
Of the 35 million prior authorization requests submitted to Medicare Advantage in 2021, 2 million were fully or partially denied.
Of those appealed, nearly all resulted in a fully or partially overturned denial decision.
Decision delays. Decisions can take 3 to 10 days after submission, depending on the payer. This creates operational roadblocks that make scheduling and resource allocation a chore—not to mention the impact this can have on patient satisfaction.
89% of physicians believe that the prior authorization process hurts patient clinical outcomes.
Increased time dealing with inconsistent payment policies. Practices train staff to handle variations and inconsistencies across payer requirements, keeping pace with updates, managing peer-to-peer reviews, and interpreting vague rules.
Since 2016, healthcare leaders have reported increases in prior authorization requirements year over year.
Unnecessary resource strain. All of these factors cause ongoing resource strain on practices. For example, one patient can need prior authorization that requires an appointment and associated paperwork. That initial prior authorization may get denied, forcing another appointment with more paperwork. Meanwhile, decision delays can cause an adverse event, leading to additional appointments or emergency services. Multiply that by a practice’s entire patient cohort, and that’s a lot of wasted resources.
86% of physicians think that prior authorization “sometimes, often, or always” leads to higher overall utilization of healthcare resources.
Prior Authorization Statistics: Patient Impacts
Not only do prior authorizations impact your practice operations, but they also impact the quality of care you can provide to your patients.
Limited doctor-patient interaction. There are only 24 hours in a day, and the ongoing administrative burdens of prior authorization and other medical programs mean physicians spend more hours punching keys and fewer hours giving patients face time.
Doctors spend nearly twice as much time doing administrative work as actually seeing patients.
Preventable adverse events. It is a consistent feeling among doctors that prior authorizations can compromise patient outcomes. Whether prior authorization processing takes too long or care is denied, there is no arguing that patients seldom benefit from these policies.
One-third of doctors have seen a prior authorization delay lead to a serious adverse event.
Prior Authorization Statistics: The Real Cost
Outside of the care and cost implications for patients, prior authorizations put serious financial strain on the US healthcare system:
- $35 Billion is spent in the US each year on administrative costs for prior authorization.
- Handling prior authorizations costs $11,000 per clinician per year (and clinicians include support staff like PAs and NPs).
- It costs practices $20-$30 per prior authorization submission, with the average practice submitting around 45 prior authorizations weekly.
The Numbers Don’t Lie
While these prior authorization statistics are frustrating – the reality is that this process isn’t going anywhere. But why? With so many clear metrics showing the negatives, it’s hard to understand why it would still be necessary – but it is.