Your estimated arrival time is now going up, and you’re going nowhere! An element of this frustration is because you see no end in sight, and it’s just wasted time (and fuel) as you wait. Not to mention that relative who is also now circling the airport arrivals section, and promising to themselves never do this pickup favor for you again.

Well, this is the core of many healthcare providers’ frustration with the prior authorization system. It seems as if we are just circling and circling to accommodate insurer requests, but getting nowhere by doing so. Let’s back up a bit and give you the 30,000-foot view for a general big picture of the prior authorization process.

Prior authorizations were introduced in the 1960s. Originally, they were designed as a measure to ensure appropriate utilization of healthcare services, specifically to avoid unnecessary hospitalizations. However, with time these requirements have evolved into a complex process with far-reaching implications. While insurers maintain the primary purpose of PA is to safeguard patients from unnecessary and costly interventions, concerns have arisen regarding the potential misuse of PA as a cost containment tool. 

Quite often, providers see authorization issues leading to delays in patient care and unjust denial of medically necessary treatments.

Cue the appearance of third-party solutions: to address the challenges posed by PA requirements, various third-party solutions have emerged. One of them involves the implementation of software that enables insurers to create prediction models based on historical data and member acuities. 

These predictive models aim to identify cases where PA may be warranted, thereby streamlining the process for legitimate cases while reducing administrative burden by weeding out those deemed unwarranted.

Conversely, some provider-focused software has been developed to counteract this insurer pushback. Utilizing automation and, yes, even artificial intelligence. With this, providers can identify and address common reasons for PA denials, push for consideration when appropriate, bolstering the basis for appeals, and ultimately ensuring a more transparent and efficient PA process.

This is where the circling and dizziness feelings ensue. As each side continues to create solutions to counteract the other’s last attempt to circumvent it, we are just whirring in a circle of reactive solutions instead of really thinking of answers that will be amicable for both parties. A solution is needed that fosters collaboration between healthcare providers AND payers. After all, both parties share the common goal of delivering quality healthcare, but the misalignment in their objectives at this point is hindering the process.

Let’s be clear. Healthcare providers understand the necessity of PA screening, acknowledging its role in promoting evidence-based care and cost-effectiveness. On the flip side, insurers are also aware of the growing concern that some patients are being denied essential treatments recommended by reputable providers, due to rigid PA criteria.

So back to our airport analogy. I’d like to propose a “TSA PreCheck” style solution to this conflict. As we all know, TSA has extensive security measures in place. Line up, IDs out, shoes off and then pat downs if you look like you’re smuggling more than 3.4 ounces of liquid (gasp!). 

But then there are those who qualify as trusted travelers with TSA PreCheck.

Less scrutiny, shoes stay on, even laptops can stay put. The concept is that once they have been vetted and proven to be trusted, they are given more leeway. Of course, at any time they can be pulled over for a spot check; even lose this privilege if there is any reason for concern.

Imagine we introduced a similar collaborative technique for prior authorizations. Here is how it would fly:

Insurers introduce a tiered methodology to provider credentialing based on providers’ historical adherence to evidence-based practices, patient outcomes, and avoiding rehospitalizations. Providers with a proven track record of delivering high-quality care could be granted Tier 2 status. This allows for expedited PA approvals, and recognized standard procedures that do not require PA, thereby reducing administrative burdens.

By establishing this, a provider is motivated to maintain this status and, therefore, ensures their adherence to insurer rules and directives. Insurer relaxes the heavy scrutiny, but reserves the right to periodically check on provider observance of obligations and red flag or demote to Tier 1 as necessary. 

This can really be a win-win situation that can lead to more collaboration with the insurer, and the provider finally being on the same page once and for all.

Now nobody said this will be easy to implement. It will likely need to begin with conversation between leadership on both ends of what the criteria would be, and what effect this tier-based approach will have on the current PA process. So, at this point, please look at this as an idea. 

An idea with only the best interests of everyone in mind, to solve an industry problem that has been going on for too long. After all that’s how all good ideas “takeoff” — it all starts with an idea. Let’s just hope this one lands!

Steve Shain is Partner, EVP of Contracting at LTC Ally. His team negotiates managed care contracts and authorizations on behalf of healthcare providers. Contact him directly at steves@ltcally.com.

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.

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CHOW stands for Change of OWnership.  As the larger monster-size chains began weaning themselves out of the SNF market a few years back, it gave opportunity for many regional operators, as well as newbie operators to seize an opportunity to acquire these facilities.

It goes without saying that the heightened demand increased the cost per bed in certain markets. A higher fee to pay for a facility means the operator has to get creative in ways to enhance the facility to ensure demand for their facility is high, census stays strong, and ultimately the facilities are performing well. 

As this began affecting the market, governing agencies and payers each respectively began noticing the frequency of these transactions and potential pitfalls, and began forming policies around that. Licensure with state departments of health became more inquisitive, to ensure new operators and investors have the capability and wherewithal to handle these proposed acquisitions responsibly. This extensive process led to longer timelines until a facility obtained its license. Managed care organizations who have typically allowed contract assumptions and using prior contracts, now pulled back.

Longer licensing timelines mean that Medicare and Medicaid provider enrollments, which are required upon CHOW, are now held up, as license approval is a necessary item to begin each enrollment. The Medicare approval process also got extended due to new processes. 

I think you are guessing where the next step is going — managed care payers that require Medicare or Medicaid approval are now held up on drafting new contracts due to the wait on CMS or Medicaid approvals.

All of these delays affect cash flow of a facility, and when operations get tight and spending gets scrutinized the facilities can potentially go one of two ways. 

One is the operator identifies areas they can improve even further. This includes expediting the necessary approvals, trimming the costs the facility is spending in areas not worthwhile, and of course negotiating on their reimbursement and financial terms in order to keep a healthy and profitable facility running. 

The less desirable way some operators deal with this is to reluctantly take an honest look in the mirror and be realistic on the chances of them successfully operating this facility. When they come to the realization the distance between them and success is beyond reasonable measures, they begin feeling out the market and consider selling. And that my friends is how we go full circle, leading back to a new CHOW. Rinse. Repeat.

This cycle is great for those in the CHOW and managed care contracting business (cough, cough), but is not the most healthy for a facility to change hands frequently. To be clear, a CHOW very often leads to fresh eyes and a better operator leading the facility and better outcomes. However, like the resume that shows the candidate hopping from one job to the next every six months, a facility changing so many hands leads to a broken chain in the operational experience. 

While often these changes of ownership are not preventable and even necessary, it is important that each staff member prepare ways to ensure that this does not affect patient care and the overall flow of day-to-day operations. Preparation is the name of the game. 

The outgoing operator needs to educate the new operator on the dynamics and specifics of how each area of the operations have run, and by whom. The incoming operator needs to prepare an extensive list of all the items that need to be put in place to ease the transition, and to continue operations forward. The facility staff need to bring up any questions on how this change may affect their area to the operator, who may not be aware of the specifics needed unless brought to their attention. By having these preemptive discussions, it will ensure all has been taken into consideration. 

Upon CHOW, aside for the technical hiccups such as email addresses changing and perhaps staffing workflow rearrangements, there is also often confusion on the admissions and business office end regarding working with the payers. Depending on the agreement made with the seller, and based on state requirements, there are varying arrangements that may be set up regarding new admissions, authorizations and billing. 

This communication is one we have found to be most tricky, especially as new payer contracts are set up and the information is a moving target as it continues to change for the following months post CHOW. One of the responsibilities our contracting team begins working on weeks before CHOW and during is giving clear direction to each department based on insurer and payer allowances. As the weeks go on every time a payer updates their arrangement, a new report is shared with staff to work off regarding which credentials to admit new admissions with; how to obtain authorizations; and ultimately how to bill at month’s end.

This may all sound foreign to you, as it may be your first time experiencing a CHOW. You can rest assured that this process is one that many professionals deal with quite often, and by preparing properly and taking their guidance on best practice, you too can CHOW like a pro. The key is, as they say in The Lion King, be prepared!

Steve Shain is Partner, EVP of Contracting at LTC Ally. His team negotiates Managed Care contracts and authorizations on behalf of Healthcare providers. Contact him directly at steves@ltcally.com.

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.