Several large manufacturers currently offer prior authorization services for certain product lines. Why would they do this given the cost and regulatory exposure? Obviously, they believe it increases the utilization of their products. How could a smaller manufacturer decide if this is a good investment? Here are a couple considerations:
- Is your product part of a costly procedure (> $2000)?
- Are sales delayed or impaired because of the need for prior authorization?
- Would offering the service present a competitive advantage?
- Would your company be viewed as providing value to key customers?
Any office that has performed the prior authorization process for their patients, knows the process is extremely burdensome and time consuming. According to a study, the average physician practice devoted 1 hour of physician time, 13.1 hours of nursing time, and 6.3 hours of clerical time to the prior authorization process each week in 2006 (What Does It Cost Physician Practices To Interact With Health Insurance Plans, Lawrence P. Casalino et al, Health Affairs 28.4 (2009): w533– w543 at w537)
Many payers require physicians to submit specific information for prior authorization review to determine appropriateness of medical service (s), based on medical necessity and benefit coverage. External prior authorization services save practice time allowing practice personnel to perform other duties.
A vendor supported prior authorization service provides several advantages.
To name just a few:
- Saves time for the office staff
- Timely decisions from payers
- Provides a prior authorization request form for all pertinent information required for the insurance company per procedure (s)
- Ensure HIPPA compliance