AI ushers in next-gen prior authorization in healthcare

Artificial intelligence—the simulation of human intelligence by machines—is rapidly becoming a key enabler for businesses to deliver consistent, high-quality, and efficient outcomes. Healthcare organizations across the value chain are making significant strides in embedding AI capabilities in areas such as diagnostics, medical imaging, and lifestyle management.

One healthcare process that could potentially be improved through the application of AI is prior authorization (PA). PA is a core administrative process in which payers require providers to obtain preapproval to administer a service or a medication as a condition of coverage. The goal of PA is to ensure members receive the most appropriate care for their medical needs in alignment with the latest medical evidence and guidelines. PA can prevent wholly inappropriate service utilization or, more commonly, ensure that first-line treatments are attempted before escalating to more invasive or risky therapies.

The PA process can lead to straight approval, a recommendation to either start with a less expensive option (called step therapy) or to pursue an alternative treatment path, or a denial of coverage. Payers consider PA a core component of their utilization management programs, which aim to determine the appropriateness of medical care and to reduce fraud, waste, and abuse in medical spending.

While the healthcare industry has made strides toward standardizing and automating PA, the process continues to be an administrative challenge. Payers’ clinical staff must devote considerable time to reviewing PA requests. Meanwhile, doctors and staff report spending 13 hours per week on PA many clinicians believe it undermines their clinical judgment and can inhibit timely care.

Our analysis suggests that AI-enabled PA can automate 50 to 75 percent of manual tasks, boosting efficiency, reducing costs, and freeing clinicians at both payers and providers to focus on complex cases and actual care delivery and coordination. This, in turn, may improve the healthcare experience for both clinicians and insurance plan members.

In this article, we discuss the state of automation in PA; how AI may be able to transform the practice; the potential benefits this would bring to payers, providers, and members; and challenges the industry will need to overcome.

CT Bureau