Prior authorization is a practice in the health care industry that's often misunderstood. What is it exactly, and why do health plans use it? 

On this episode of HealthChangers, host Ashley Bach spoke with Dr. Donna Milavetz, chief medical officer for Regence, about how prior authorization helps make health care safer, more effective and more affordable, and the pain points that the industry is committed to improving. She also discusses how Regence is a national leader in streamlining the prior authorization process for providers and our members.

Listen to the full podcast episode on the player above. Below are some highlights, which have been edited for length and clarity. 

AB: What is prior authorization?

DM: Prior authorization is a tool that health plans use to review certain treatments, certain medications and certain procedures to make sure that they're covered with evidence-based and cost-effective care, while ensuring that every health care dollar is spent wisely. What people have some misunderstanding about is that, in most cases, Regence members don't need a prior authorization to receive care, but it's particularly useful in those high-risk, high-cost health care decisions.  

What it does do, prior authorization helps identify the most cost-effective care option without compromising quality. In fact, I would say that it actually enhances quality, for that reason. It prevents redundant tests, and it flags conflicting diagnoses. It also helps members know what's covered as part of their benefits, preventing costly surprises, kind of on the back end. And it really helps us as a health plan work with our members to really make sure that they are getting the highest-quality treatments that they deserve.

I will also say, and this is probably a little-known fact,is that we make our decisions on prior authorization to cover treatment or not in collaboration with doctors, nurses and other clinical experts like pharmacists to inform our medical policy.

And then lastly, prior authorization receives a lot of attention, especially in social media and in the press these days, but it really only impacts a small amount of health care. A recent study by America’s Health Insurance Plans, or AHIP for short, found that only 4% of prescription claims and 7% of medical claims in the commercial market are subject to prior authorization.

AB: Why does prior auth receive so much attention in social media posts and news stories?

DM: Prior authorization, it's not perfect, and it's created a fair amount of criticism from physicians and providers, as well as patients, who see it as slow and cumbersome. Think about it, if you're a patient or you're a provider and you've asked a health plan for a decision on a procedure. It's that time period between when that prior authorization is submitted to when a decision is made, yes or no; it's that “limbo land” that I think causes the most emotional distress, and we are committed at Regence to close that gap of time to ensure that decisions are timely, that they're evidence-based, that they're most up-to-date, and they're done in a way that we give that feedback as fast as we possibly can.

Our goal is to ensure that our members receive the right care, at the right time, in the right setting, always. And that's why Regence is committed as a national leader in using technology to streamline that prior authorization process and to speed up when providers and patients get their decisions. I think feedback is really important as a health plan and listening to that feedback and then acting on it. So we really take this criticism about prior authorization seriously. And as a health insurer, we don't want to be an obstacle between a patient and the provider for that treatment, whatever it is. 

AB: Can you tell me more about Regence’s work using technology to streamline the prior auth process?

DM: This is something that I'm exceedingly proud of, working for Regence. Regence recognized early that one of the biggest issues with prior authorization is poor technology, that the systems that health plans like us use and the systems that hospitals use don't always talk to each other and definitely don't work well together.

So Regence became a leader for many years now in a space called interoperability, making it easier for the technology used by health plans and those by providers to work together in a much more seamless way. In 2022, the work accumulated with us being the first payer in the nation to implement this new technology, called SmartAuth, to speed up the pre-authorization request for patients. 

Our parent company was a founding member of the CARIN Alliance, a collaboration across the health care ecosystem that aims to make the exchange of health information easier. Regence worked directly with a provider in Washington state, MultiCare, and a private-sector initiative, the Da Vinci Project – of which our parent company is a founding member – to use National FHIR (Fast Healthcare Interoperability Resources) standards to make the prior authorization process faster and easier.

AB: What have been the results of SmartAuth so far?

DM: This is really exciting, Ashley. With our SmartAuth solution, doctors can make requests directly from the patient's electronic health record, making it easier to get faster decisions and to reduce paperwork so that limbo time collapses. Ninety-four percent of requests receive a response, meaning a request is either approved or no prior authorization is needed, within seconds. That's amazing. This is truly a game changer for providers and for patients. They get answers almost instantaneously.

MultiCare has been using SmartAuth since 2022 and went from processing three to five prior authorization requests per hour – like there was actually a person having to do this – to 10 to 12 in that same hour. That reduction in manpower and just that administrative overhead is cost saving, but the emotional value that it brings to both providers and patients is limitless. With that pilot being successful, we're now partnering with other providers in states we serve, including Valley Medical Center, Bend Memorial Clinic and UW Medicine, just to name a few.

AB: How was Regence involved in the national announcements this summer from health plans about improving the prior auth process?

DM: Both AHIP (America’s Health Insurance Plans) and the Blue Cross Blue Shield Association (BCBSA) jointly announced commitments to improve prior authorization, and Regence signed on to both of these commitments enthusiastically with other payers around the country. This action reflects a shared recognition that the system can and must do better for the people it serves. And the work builds on changes we've already implemented to make the process faster and easier.

Regence and many other of the Blue Cross Blue Shield companies have reduced the scope of services subjected to prior authorization in the past several years; but the pledge in June is focused on further improvements to the patient experience, including further reducing the use of in-network prior authorization for certain medical services, fast-tracking responses for those electronic prior authorization requests, and providing personalized support and more transparency in the prior authorization process.

And then lastly, creating a more seamless process for people who switch health insurance companies. So that if they were approved for a procedure in one plan and that prior authorization went through in December, and you changed insurance companies because of your employer, and in January, you're scheduled to have the surgery, but you're with the different health plan, instead of having to start that whole process over, that prior authorization is transferable.

This is all a really big deal for preventing the delay of really important and needed care. It means that patients will experience faster access to medical care, clear explanations and a simpler process navigating the health system. Providers who submit these prior authorization requests electronically and with all the necessary documentation will experience a more efficient process, faster responses and low volume of claims that are subject to prior authorization. This is a win-win-win for everyone.