How do authorization denials drive costs in healthcare

24/, BillingParadise Revenue Cycle Masters Reduce authorization denials to improve reimbursement rate Obtaining prior authorizations costs physicians more than any other denials, and the issue is growing. A poll by the Medical Group Management Association (MGMA) shows that 86%of healthcare organizations believe the prior authorization burden is worsening. Prior Authorization Costs US Doctors $31B Each Year Each practice spends over $68,000 annually Here's how that breaks down Lawyer Senior Administrative Nursing Staff MDs Clerical Staff Accountant $15,767 $2,149 $3,522 $21,796 $25,040 Nearly all physicians noted that wait times corresponded with delays in necessary care, which added to the risk of adverse events. Significantly, 78% of respondents said that PAs could result in patients forgoing necessary treatments, according to the release. 92% of doctors say that prior authorization harms patient access to care, ultimately damaging clinical quality outcomes. Prior Authorization Predicament Medical Necessity Authorization 39% 35% Demo Graphics 17% Eligibility 8% Revenue lost due to Write-offs 8$ 0$ 16 $ Eligibility Claim Submission Administrative Transaction Cost The Chart below shows the reason PA was denied 80 Practice manager I Payers 60 40 - 20 20 • Experimental - not on compendium listing/guideline 42 70 • Inadequate supporting evidence 58 65 40 Experimental - not on FDA label • Administrative (e.g, wrong coding) • Experimental - not on required pathway 50 1 61 29 23 60 26 I 13 • Not medically necessary I51 12 14 10 80 • Other Prior Authorization Remittance Advice