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Sep 8 2011   11:49AM GMT

Prior authorization: Impact on payers due to ICD-10

Posted by: Jenny Laurello
Clinical integration, Coding and documentation, ICD-10, Prior authorization

Guest post by: Baskar Mohan, Virtusa

In my last blog titled, “Prior authorization – Impact on providers due to ICD-10,” I highlighted some key impact areas for provider organizations. In this blog, let’s take a look at the impact on payer organizations. Preventive care, patient wellness and cost savings are some of the key factors that drive the need for more optimized prior authorization implementations. In order to streamline the prior auth process and make it error-free and convenient for all the stakeholders in the health care process — including providers, payers, physicians and patients – payer organizations need to consider the following areas as they initiate their ICD-10 implementation program:

  1. Need for submission – Due to the increase in the number of new procedures and associated ICD-10 diagnosis codes being mandated for prior authorization, payers end up denying claims due to non-submission of prior auth by providers. This causes significant strain to the payers, providers and members involved.
  2. Prior auth submission errors – Almost 60% of prior auths submitted have at least one piece or more of missing information. The auth nurses spend a great deal of time on the phone with the providers to get the missing information and, in most cases, it takes more than one call to get all the required information.
  3. Patient care – Payers depend greatly on member satisfaction to stay ahead of the competition. Improper ICD-10 submission might cause delays in providing the recommended care at the right time.
  4. Missing or incorrect ICD-10 codes – Payers will have to train their employees on the new ICD-10 codes as it relates to the existing and new procedures (e.g., C-section) that might require prior authorizations. It can be very difficult training the payer employees who are used to looking at ICD-9 codes, to review the ICD-10 codes. This will significantly impact the throughput of the employees.
  5. Cost increase in processing – With the increase of complexities involved in the submission, review and approval of the prior authorizations process with ICD-10 codes, the payer organizations are faced with a significant cost increase in areas of staffing additional nurses and training existing nurses.
  6. Medical fraud – Medical fraud is another major concern for the payers. With the addition of new procedures and ICD-10 codes, it becomes easier for providers to request prior authorizations for the additional diagnosis codes.
  7. Demand for auth nurses – Prior authorizations require a lot of manual review. With ICD-10 implementation it becomes even more difficult and time consuming for review. This causes many payer organizations to hire more auth nurses, which in turn drives up demand for skilled nurses.

The goal of prior auth is to make the health care process simple, convenient and hassle-free for the members. Technology offers the opportunity to make that happen. For payers and providers, adopting technology and integrating the entire process can be the crucial differentiator between a satisfied or a dissatisfied patient!

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