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Five ways FHIR will create ripple effects in the world of prior authorization in healthcare

Shyamsree Nandi
18 Feb 2022

FHIR is an incredibly strong mandate that is likely to change all our touchpoints with healthcare processes. And this is just the beginning!

Interoperability is increasingly taking center stage when it comes to care coordination and digital enablement. Most payers have already implemented the first leg of Fast Healthcare Interoperability Resources (FHIR) with a view to improving patient access and provider directories. That’s just the tip of the iceberg though, as my colleague Dr. Christina Bharathi Remediakis wrote in her blog recently: (FHIR implementation is more than a regulatory tick-off item!).

Another FHIR-y innovation from CMS

A few weeks ago, CMS declared the latest improvement that will be targeted through FHIR for prior authorization (PA) processes. Provider burnout has been a big concern of PAs in the past because providers often spend a lot of time maneuvering through associated approval processes. While reduced administrative transaction cost and a “frictionless” health experience are the core objectives of the PA process, the administrative costs are at least five times higher. Needless to say, it also results in a significant amount of out-of-pocket spend. The most striking challenge though is by the patients. One study suggests that 78% of patients feel that PA-related delays and uncertainties stall treatment plans. The latest release by CMS intends to streamline the PA process in the following five ways using FHIR and a set of added APIs.

Real-time exchange of supporting documentation

CMS has just proposed the use of the Document Requirement Lookup Service (DRLS) API, which will ease the burden created by the tremendous amount of documentation generated by PA processes. The idea is to transparently make the document templates and requirements known to providers at the point of care. The DRLS has two components viz. coverage requirements discovery (CRD) and documentation templates and payer rules (DTRs), which should succinctly define the requirements for a provider and provide a more complete PA documentation. This process is largely manual and often sent through fax, email, etc. – no wonder that PA processes are fully automated in only 13% of provider settings.

“Straight through” submission

The FHIR Prior Authorization Support (PAS) API is supposed to facilitate a direct exchange of data between the EHR system and payer systems for PA decisions. Today, clinicians often rekey the information through payer portals and this is not only error-prone but also extremely manual, requiring several iterations to get the information across to payers. Imagine the potential of PAS, where an EHR system directly sends care details through a FHIR resource which is readily processed within the payer applications to update  about the decision and requirements in near-real time. This also eliminates complicated processes where provider staff need to keep track of payer-specific rules and coverage plans.

Transparent denials

Denials significantly impact providers’ revenue cycle management and are somewhat more common in the PA scenario. CMS will now require the reason for denial be clearly coded by payers when denying PAs regardless of their source. Several denial AI solutions exist to detect the reasons and address them early on. However, the CMS rule will be a game changer in facilitating better payer provider exchange. The expectation from CMS is to issue decisions on urgent PA requests within 72 hours and for non-urgent cases within seven calendar days, including reasons for denial. This will help to improve PA turnaround as a whole and reduce denials in the long run.

Robust medical necessity definitions

Clinical quality language (CQL) is an FHIR-compliant canonical representation for exchanging clinical knowledge and it can be a great lever for sharing information about medical necessity checks and clinical codes that can be used in real time to check against Medicare rules. CQL can help in effectively documenting the allowable use of certain types of clinical services or medical devices that are covered as part of the plan provided by the payer.

PA auto adjudication

Sooner than we think, auto adjudication of PA may become a reality. With all this improved processing and real-time decision making, it is likely that a significant percentage of PA transactions may not need human intervention or manual data entry by physicians and providers. The data can be populated directly from EHRs and used for decisioning against payers’ rules, utilization management, fraud detection, etc.

PA is just one of many examples of how FHIR can significantly alter members’ health experience and streamline processes across the entire ecosystem. Although the transformation may be slow, FHIR is an incredibly strong mandate that is likely to change all our touchpoints with healthcare processes. And this is just the beginning!

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