Medicare Advantage Plans: Leverage Intelligent Prior Authorization to Get Ahead of CMS Audits

Digital technologies are revolutionizing the healthcare industry, and one area that is experiencing significant transformation is Medicare Advantage (MA). Recognizing the potential of these technologies, the Centers for Medicare & Medicaid Services (CMS) has taken a proactive step by finalizing a rule that focuses on expanding access to health information and fixing the broken MA prior authorization (PA) process.

This move highlights the growing importance of leveraging digital tools to streamline and digitize healthcare processes, ensuring better patient care and outcomes. In this article, we take a closer look at how these tools can help MA plans prepare for the future of prior authorization.

CMS Final Rule Drives Significant Changes for Medicare Advantage Plans

The recent CMS Final Rule is driving major changes for Medicare Advantage (MA) plans, with a focus on streamlining the prior authorization process. Prior authorization is a critical step in healthcare where providers seek approval from insurance companies before performing certain procedures or prescribing specific treatments. Historically, this process has been burdensome, time-consuming, and prone to errors. However, with the introduction of digital technologies, the landscape is beginning to shift for the better.

This rule complements the requirements set forth in the Contract Year (CY) 2024 MA and Part D final rule, which prioritize continuity of care and reduce disruptions for beneficiaries. Starting in 2026, impacted payers will be obligated to provide prior authorization decisions within shorter timeframes, ensuring expedited requests are addressed within 72 hours and standard requests within seven calendar days. This new rule aims to cut decision timeframes in half for some payers, ultimately improving efficiency and reducing administrative burden.

To facilitate a more efficient prior authorization process, impacted payers are also required to implement a Health Level 7 (HL7®) Fast Healthcare Interoperability Resources (FHIR®) Prior Authorization application programming interface (API). By leveraging digital technologies, such as AI and advanced analytics, this API automates and streamlines the entire prior authorization process, enabling quicker approvals and reducing waiting times for patients.

The use of AI algorithms ensures precision and consistency in analyzing data, minimizing the chances of errors and discrepancies. This means that patients receive the appropriate care without unnecessary delays, while healthcare providers can focus on delivering quality care and improving patient satisfaction.

How Intelligent Prior Authorization Helps MA Plans

Intelligent prior authorization (IPA) is an advanced solution that harnesses the power of artificial intelligence (AI) and advanced analytics to automate and streamline the prior authorization process. As defined by Gartner®, "Intelligent prior authorizations use APIs, NLP and AI to automate the decision making, data exchange and workflows between providers and payers to process requests for services while informing consumers of their PA status."

By leveraging AI algorithms, these tools can analyze vast amounts of data quickly and accurately, significantly reducing administrative burdens and improving efficiency. This automation leads to faster approvals, reducing waiting times for patients and ensuring timely access to necessary treatments. In addition, healthcare providers can dedicate more time and attention to more critical aspects of patient care, enhancing overall patient satisfaction and experience.

The benefits of implementing intelligent prior authorization tools extend beyond efficiency. These tools also improve accuracy by minimizing human error in the prior authorization process. By analyzing data with precision and consistency, AI algorithms reduce the chances of errors and discrepancies, ensuring that patients receive the appropriate care without unnecessary delays.

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Another advantage of embracing intelligent prior authorization tools is the improved audit preparedness for Medicare Advantage plans. These tools provide comprehensive documentation of all actions taken during the prior authorization process, offering transparency and accountability. With easy access to detailed records, MA plans can efficiently respond to audits, demonstrating compliance with regulations and ensuring adherence to best practices.

Having a robust audit trail is crucial for Medicare Advantage plans to maintain compliance and avoid penalties. The comprehensive documentation provided by intelligent prior authorization tools enables plans to track every step of the authorization process, including the submission of requests, communication with providers, and final approval decisions. This level of transparency not only ensures accountability but also allows plans to effectively respond to audits by providing concrete evidence of their adherence to regulations.

In addition to facilitating the audit process, the detailed records generated by these tools also help identify areas for process improvement. By analyzing the data captured in the documentation, MA plans can identify bottlenecks, inefficiencies, and potential errors in their prior authorization workflows. This insight enables plans to make informed decisions to streamline their processes, reduce costs, and enhance patient care.

MA Plans Should Work With an Experienced, Trusted Vendor to Implement IPA

Because IPA is an emerging market, the technology continues to evolve as payers and providers tackle manual clinical and administrative workflow obstacles. As detailed by Gartner in their 2023 Market Guide for Intelligent Prior Authorization, the current supporting technology capabilities within the IPA domain include:

• IPA portal tools - These applications manage the initial payer and provider PA submission and the final approval process. They address the unique and specific  needs of healthcare PAs with providers’ demographics and clinical data, as well as payers’ eligibility and benefit information.

• IPA API-enabled workflows - These tools apply real-time and near-real-time PA approval process workflow automation between the payer, provider and consumer. This includes benefit, medical policy and clinical data exchanges. For example, they are used to request and verify service authorization with medical necessity determinations while informing consumers of their PA status.

• IPA NLP, machine learning (ML) and AI solutions - These solutions interpret unstructured clinical and benefit data to ingest the prior authorization information into an EHR and core administration technology. These tools apply AI to identify data inaccuracies and to proactively approve the  

Despite the promise of these technologies, concerns regarding prior authorization denials attributed to AI algorithms have emerged. For that reason, is crucial that Medicare Advantage plans  exercise caution and select vendor partners that provide transparent, fair, and unbiased IPA tools.

Compliance with regulations and oversight are essential to ensure patient safety and maintain the integrity of the PA process. When choosing a vendor, Medicare Advantage plans should consider factors such as the vendor's experience in the healthcare industry, the functionality of their tools, their ability to integrate with existing systems, and their track record in terms of security and compliance.

In conclusion, the adoption of intelligent prior authorization tools presents a significant opportunity for Medicare Advantage plans to not only meet regulatory requirements, but also improve operational efficiency and patient outcomes. As digital technologies reshape the healthcare landscape, embracing these tools is not just a necessity but a competitive advantage. 

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Vital Data Technology is proud to be recognized by Gartner, the world's leading research and advisory company, as a top Intelligent Prior Authorization vendor. This acknowledgement, featured in Gartner's Market Guide for Intelligent Prior Authorization, U.S. Healthcare Organizations, highlights our commitment to delivering integrated, cloud-based utilization management solutions, and reinforces our position as a leader in transforming healthcare with innovative, next-generation technology.