Where Data Quality Can Make or Break Prior Authorization Accuracy

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Highlights of this episode include:

• Current challenges impacting prior authorization workflows today
• What impact data quality has on prior authorization
• How the CMS Interoperability and Prior Authorization Final Rule will impact how teams exchange and structure data
• How data quality impacts a hospital’s bottom line

Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast.  We’re pleased to welcome Shobha Phansalkar, PhD, FAMIA. Shobha is the Vice President of Client Solutions and Innovation for Wolters Kluwer Health Language, where she leverages her extensive expertise in medical informatics to drive impactful solutions that address challenges in semantic interoperability and enhance healthcare data quality. Shobha has been in the healthcare information technology field in industry and academia for more than 20 years. She is an internationally recognized thought leader in the field of clinical decision support and a fellow of the American Medical Informatics Association. In addition to her roles in the industry, she has published more than 50 peer-reviewed articles and book chapters on CDS and led research for the Agency for Healthcare Research and Quality, the U.S. Department of Veterans Affairs, and the Office of the National Coordinator for HIT. She also serves on the editorial board of BMC Informatics and Decision Making. Welcome, and thank you so much for joining us, Shobha.

Shobha Phansalkar: Thanks, Kelly. Pleasure to be here.

Kelly: Great. Well, let’s go ahead and jump in. So, Shobha, please tell us about yourself and your background.

Shobha: For sure. First, thank you for the opportunity, Kelly. Appreciate that. Thank you for that introduction as well. A bit more context on who I am and Health Language, which is a part of Wolters Kluwer Health. So, I’m a clinical informaticist and a pharmacist by background. Over 20 years in the healthcare IT space. I lead Client Solutions and Innovation at Health Language and our customers span the healthcare ecosystem, where we serve payers, providers, life sciences with the ability to improve data quality. And that really is the foundation of the value proposition that we provide our customers with, where we serve as a single source of truth for industry standards, your reference terminologies, but also help them improve the quality of their data by standardizing and normalizing it.

In addition, we serve as the providers of knowledge assets, code groups, value sets that help them power their business rules, as well as their clinical decision support processes.

Kelly: Wonderful. Thank you for sharing that with us. So, Shobha, what are the current challenges impacting prior authorization workflows today?

Shobha: Oh, huge ramifications. And a key time for us to be talking about this. As you know, prior authorization has been front and center in the news this year. It’s unfortunate from many perspectives. But I think because your audience is hospital finance focused, it might make sense for me to share some staggering numbers associated with prior authorization. So just to give you a sense of the magnitude of the problem, right? $11 billion, that’s billion with a B, is spent by providers in prior authorization transactions, purely from an administrative perspective. And if you think about it, that’s time taken away from clinical care. Now, 37% of these transactions are manual, and the cost per transaction is at an average of about $11.

If we were to make that transaction electronic, it actually halves the amount spent, which is at about $5.70. Now, the kicker here is that irrespective of whether it’s a manual or an electronic transaction, a large part of the burden of that cost is taken up by providers. About 70% of that cost is taken up by providers and about 30% by payers. That’s a huge burden on providers. And granted the numbers are large, but the impact that that has in terms of provider burden, a recent survey by the American Medical Association actually showed that 88% of providers felt that PA requirements posed a high or extremely high burden on them. And if you take that thread and think about what that means to patient care, 30% of them said they didn’t even think that the PA requirements were evidence-based. And another third thought that they might actually abandon the care of their patient because of the administrative overhead associated with prior authorization.

So, the reason I’m mentioning this, Kelly, is there is the financial or the cost aspect for it. But there’s also a huge burden that it poses on denied, delayed care for patients, as well as huge burden on providers resulting in provider burnout.

Kelly: Wow. Yeah, those are some significant challenges, Shobha. Thanks for sharing those with us. So, what impact does data quality have on prior authorization and ensuring patients receive coverage for appropriate care?

Shobha: Yeah, great question. I mean, there’s so much that we see in the news about the frustration that members and patients have when they have to deal with prior authorization denials or just the burden of going through the process of requesting prior authorization. But if you think about it, a study shows 30% of these requests get denied. 40% of those are actually related to poor data quality. And that’s where the opportunity is. I mean, I think with all of the huge numbers that we have come to recognize, I think it’s important to recognize where can we make a difference. I think the difference is in making these electronic, in standardizing the data that’s being shared between payers and providers, as well as making sure that the data is of high quality so that patients are able to get their requests approved or receive a reason for what the next step is quickly.

That’s going to fundamentally be made possible by having good data quality that’s exchanged between these systems and making sure that there’s interoperability within that data exchange. What that means, Kelly, is that fundamentally when two systems are talking to each other, they need to use the same language. And a lot of the regulations that are coming through are actually focusing on that. They’re making sure that not only are we exchanging the data in standardized FHIR APIs, but we’re making sure that we call out the terminologies that will populate these FHIR APIs. And that standardization rings right home to what we do at Health Language because we are making sure that we can take that data, we can serve it up as good quality data, not just from validating the terminologies that are used for this data exchange, but also making sure that we are supporting our payer customers in being able to represent that data as high quality data that can then reduce the amount of time for prior authorization requests.

Kelly: Wow. I mean, thank you so much for sharing that. That’s quite the significant impact. So how will the CMS Interoperability and Prior Authorization Final Rule impact how teams exchange and structure data?

Shobha: Yeah. No. Like I said earlier in this conversation, I think our conversation is so timely, right? A lot of good information as well as conversation has happened to support this prior authorization rule. The CMS Final Rule, which is 0057-F, basically mandates the use of FHIR-based APIs and produces transparency around prior authorization. And that’s fundamental, right? Because not only are you imposing deadlines for implementing the FHIR APIs, but you’re also calling for the decision timeframes to be expedited. You’re calling for transparency requirements so that both providers and patients are aware as to whether their request was denied for a certain reason and how they can ameliorate that. So, all of this, I think we’re in a very good place in terms of serving the needs of the problem, which is making sure that we are standardizing the exchange of information, but also accountability so that providers as well as payers can have expedited decision-making for this process.

Kelly: Most definitely. Thank you for sharing that. And how does data quality impact a hospital’s bottom line, especially around prior authorization?

Shobha: Yeah. That’s– it all comes down to making sure that we are making sound financial decisions. I mean, given the market and given that where we are economically as different parts of the healthcare system strive for better bottom lines, I mean, I think data quality directly impacts financial performance. So let me give you an example of that. Recently, we collaborated with MCG Health, a big player in the space of utilization management. And what we were able to show is by creating knowledge assets, which we call value sets in order to power their utilization management engine, they were able to bring down the average amount of time that a utilization management nurse spent in reviewing a request from 20 minutes to 3 minutes. Just think about that. That’s staggering, right?

Just by making sure that we are exchanging data in a standardized way, they were able to bring back the right information about that patient from the EHR, extract it, summarize it, present it back to the utilization management nurse, and that three minutes is 85% faster than the national average. So, think about everything we talked about in terms of the financial burden. That itself was reduced. A $42 million savings annually that MCG Health now has because it’s able to power their rules for decision-making better. And so I tie that back to your question, which is if we can standardize the way we are exchanging information between payers and providers, just like MCG Health example, we would be able to get better data between these entities, whether it’s the provider sending the prior authorization request and knowing at the point of care, “What are the documents or what is the information that I need to provide in order to make sure that I have a successful request submitted to the payer?” And also for the payer to then know, “What’s the documentation that I need in order to make sure that I’m providing the right decision back to the provider?”

So, all of this rings or resonates very closely to what we do at Health Language, and we are very excited for the Prior Authorization Final Rule because it aligns very much with what we consider as the data quality journey for our customers. There’s sort of that threefold impact. You’re making sure that the terminologies that are powering these fire APIs are containing valid codes. You’re making sure that the data quality that’s exchanged between the provider and the payer is good quality data. And then last but not the least is making sure that the rules or the benefits that the payers are sending back to their providers are represented as standard value sets that can then be used to make streamlined decisions on what that prior authorization request should be.

Kelly: Yeah. I mean, data quality is so very important, and I think you kind of proved it with what you just said. Well, thank you so much, Shobha, for sharing your insights with us on where data quality can make or break prior authorization accuracy. We appreciate all your insights.

And if a listener wants to learn more or contact you to discuss this topic further, how best can they do that?

Shobha: Oh, thank you for asking that, Kelly. We are always excited at Health Language to talk to people about what we do. Our website carries a wealth of information, our value proposition, and our offerings to the market. In addition, when you go on the website, you can see that there’s the option to speak to an expert. That’s another way that we can have a conversation. Would love to learn about where we can help.

Kelly: Great, thank you for providing that. And thank you all for joining us for this episode of The Hospital Finance Podcast. Until next time…

[music] This concludes today’s episode of The Hospital Finance Podcast. For show notes and additional resources to help you protect and enhance revenue at your hospital, visit besler.holdings/podcasts. The Hospital Finance Podcast is a production of Besler Holdings.

Given the significant impact quick fixes in data quality infrastructure can have on an organization’s prior authorization infrastructure, Shobha and her team of informatics experts are happy to meet with any of our listeners to review your current data supply chain and evaluate quick wins to accelerate your path to compliance with the prior authorization rule. Schedule a meeting with her. 

Additional Resource: https://www.wolterskluwer.com/en/expert-insights/bridging-the-data-divide-between-payers-and-providers?utm_campaign=core-thought-leadership&utm_medium=referral&utm_source=beslers

If you have a topic that you’d like us to discuss on The Hospital Finance Podcast or if you’d like to be a guest, drop us a line at update@besler.com.

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