Understanding Prior Authorization Outsourcing in RCM

Healthcare is indeed the most complex landscape to navigate. However one of the most pivotal aspects of healthcare operations is Revenue Cycle Management (RCM). RCM ensures the financial stability of hospitals and the healthcare ecosystem as a whole. From ensuring appointment scheduling to the final payment of medical bills, RCM covers everything. 

The primary goal of RCM is to smooth operations as much as it can. The reduction of administrative costs is another goal aligned with RCM. 

To understand RCM better, we should have a good grasp on Prior Authorization (PA). PA is not only an integral part of RCM but also the most difficult one to manage. 

In this blog, we will understand what prior authorization is and how prior authorization outsourcing has become a savior healthcare industry’s financial well being. 

What is Prior Authorization and Why is it so important in RCM?

Prior Authorization is a process of obtaining approval from a patient’s health insurance provider before giving the patient any specific services, procedures, or even medication. This is done to ensure that the services or procedures the patient is going to get are covered under the insurance policy and align with their protocol. 

This ensures that the treatment is under the patient’s budget and will not go out of his pocket. This helps to reduce claim denials and keeps the revenue cycle healthy both for the patient and the healthcare provider.  

By now you would have got an idea about why PA is critically important in RCM. But, the easier it sounds, the more complex it is. Prior Authorization is a daunting task and takes a lot of operational time. 

As it involves a good amount of paperwork and meticulous follow-up, it is time-consuming and extensive. The continuous follow-ups and a decent understanding of varying insurance policies, make the matter even more hectic.  

This is where the game-changer, outsourcing prior authorization, comes into play. By delegating this function to specialized service providers, healthcare organizations can reap several benefits. 

Prior Authorization Outsourcing takes off the administrative burden from the in-house staff, enhances efficiency, reduces errors, and speeds up authorization. Which in turn lets healthcare providers focus more on patient care while ensuring a smoother revenue cycle.

The Impact of Prior Authorization on Healthcare Providers

Read on to reflect upon the impact of prior authorization on healthcare providers:

Administrative Burden on Physicians and Staff

The process of prior authorization (PA) places a considerable administrative burden on physicians and their staff. The extensive paperwork and numerous follow-ups with insurance companies can be hectic and might take away all the focus from patient care. 

Instead of dedicating their time to patient care, physicians and their staff often find themselves entangled in the administrative loop of obtaining approvals. This becomes stressful for healthcare professionals and affects their core service which is patient care. 

In some instances, even the nurses and the administrative staff have to keep up the follow-up with insurance companies to check for authorization. The fill forms talk to the insurance companies multiple times trying to understand the change in their policies. 

Now, this is not what they are supposed to do. This burden on them makes it difficult for them to focus on their forte and thus a significant depletion in the quality of patient care.

Time and Financial Costs Associated with In-House PA Processes

Moreover, time and financial costs leak out in no time while managing Prior Authorization in-house. Let us break down the process to understand how complex it is. 

  • Verification of Insurance Details: The first and foremost step is to ensure that the details provided by the patient are accurate and right. 
  • Preparation of Documentation: Then comes the gathering and preparation of all necessary documents and clinical information required for the PA request.
  • Submission and Follow-Up: Submitting the request to the insurance company and following up regularly to check the status of the authorization.

Each step is time-consuming and requires meticulous attention to detail. The time spent on these administrative tasks could otherwise be used for patient care. 

Moreover, the financial costs associated with employing staff to handle these processes are substantial. Practices often need to hire additional administrative staff solely for managing PAs, leading to increased head counts.

Effects on Patient Care and Practice Revenue

The complexities of prior authorization impact patient care and healthcare revenue directly. There are scenarios where this authorization takes time and delay in authorization leads to delay in treatments and thus results in patient dissatisfaction or sometimes even an escalated medical condition. 

In some cases, patients even choose to go elsewhere to seek consultation which results in the lost revenue for the healthcare provider. 

In the long run, these delays and inefficiencies can lead to decreased patient retention and reduced revenue, significantly impacting the practice’s financial stability.

So after all these challenges, prior authorization does make sense when it is outsourced. Prior Authorization outsourcing has numerous benefits and is the latest development in the industry. Let us read on to understand some of the benefits of PA outsourcing. 

Benefits of Outsourcing Prior Authorization

Here are some key benefits that come from outsourcing prior authorization

Benefits of Outsourcing Prior Authorization

Reduce Denials

Outsourcing prior authorization is one of the best decisions a healthcare organization can ever make. It is quite simple, the healthcare providers when handling PA in-house lack the required staffing, and the latest knowledge on compliance and policies. Moreover, they regulate the process manually which takes a longer time. 

This, in turn, results in longer waiting periods and high denial rates. This is not doing any good to them as they are losing patents and revenue. 

However by outsourcing PA, healthcare organizations can leverage the expertise of dedicated professionals who are well-versed in the latest regulatory requirements and payer policies. 

These experts use advanced technologies and automated systems to streamline the PA process, ensuring that all necessary documentation is accurate and complete. This reduces the chances of errors and increases the chances of approval.

The costs associated with in-house prior authorization management can be qute a lot for healthcare providers. 

Some studies suggest that this process can cost between $80 and $100 per request. Outsourcing prior authorization services, such as those offered by ProMantra, can significantly reduce these costs, allowing providers to redirect resources to other critical areas.

Save Time and Money

Outsourcing PA can also save healthcare providers significant time and money. Managing PA in-house requires substantial administrative resources, including hiring and training staff, maintaining up-to-date knowledge of payer requirements, and handling the time-consuming tasks associated with the PA process.

Outsourcing these tasks allows healthcare providers to reallocate their resources more efficiently. 

It is from the reports a clinic that outsourced its PA process reported saving an average of 20 hours per week, which could then be utilized in patient care and other critical tasks.

Financially, outsourcing PA can lead to substantial cost savings. Medical practices can avoid the costs associated with denied claims and rework by reducing the need for in-house staff and lowering denial rates. 

Additionally, outsourcing partners often operate on a performance-based model, meaning their fees are tied to the success of the PA process, further incentivizing efficiency and accuracy.

Minimize Data Errors

Inaccurate data is an important reason behind claim denials and also complicates the issues even further. However, outsourcing partners reduce data errors as they have specialized staff who are trained to work on data accurately. 

These partners typically use advanced EHR systems and have automated workflows. The automation lets them ensure the work is done accurately and quickly. These systems can find faults in data and can flag the issues. They can also find the miss in the data so that they do not miss out on anything. This ensures the data accuracy. 

Improve Patient Care

Outsourcing PA can positively impact patient care and clinical outcomes. When healthcare providers are bogged down by administrative tasks, they have less time to focus on their primary responsibility: patient care. By outsourcing PA, providers can free up valuable time and resources, allowing them to devote more attention to their patients.

Improved PA processes also lead to quicker approvals for necessary treatments and medications, reducing patient care delays. This can be particularly important for patients requiring urgent or specialized treatments. Additionally, outsourcing can enhance patient satisfaction by reducing the frustration and uncertainty associated with PA delays and denials.

Key Components of Effective Prior Authorization Management

Effective PA management involves several key components that streamline the process, improve patient care, and enhance collaboration between providers and payers.

1. Accurate and Comprehensive Patient Records

One of the major components of PA management is accurate and comprehensive patient records. Aspects like medical history, patient information, and ongoing medications together constitute an accurate patient record. These records when managed by EHR can be worked upon easily. 

2. Pre-Approved Authorizations and Documentation

Pre-approved authorizations can significantly reduce the administrative burden on providers and improve the overall PA process. These pre-approvals can be based on standardized criteria, such as evidence-based review guidelines, to ensure consistency and efficiency. Documentation requirements should be clear and transparent, and providers should be notified of any changes to the PA process.

3. Patient Involvement in the PA Process

So who is all this about? Patient. The patient is the key component of the PA process. The patient’s engagement in a way where he communicates about his condition, his details, and the financial obligations aids in the process to a great extent.

4. Emerging Technologies in PA Management

Emerging technologies, such as electronic prior authorization (ePA), are transforming the PA process by reducing administrative burdens and improving efficiency. 

These ePA solutions automate the PA process and enables a secure and electronic transmission of patient information which significantly reduces the time spent on PA reviews

Overcoming Common Challenges in Prior Authorization

Prior authorization (PA) is a crucial component of managed care pharmacy, ensuring that patients receive appropriate and timely access to medications and treatments. However, the process is often plagued by inefficiencies, inconsistencies, and evolving rules, making it challenging for providers and payers to navigate. In this article, we will discuss the common challenges in PA and strategies for overcoming them.

Challenges in Prior Authorization

1. Addressing Varied and Complex Requirements of Different Payers

One of the primary challenges in PA is addressing the diverse and complex requirements of different payers. Each payer has its unique set of rules, guidelines, and criteria for authorizing treatments, which can be overwhelming for providers. 

To overcome this challenge, providers must stay up-to-date with the latest payer requirements and maintain detailed knowledge of each payer’s specific needs. 

This may involve regularly reviewing payer policies, attending industry events, and networking with peers to stay informed about the latest developments.

Moreover, providers should consider implementing a centralized PA management system that can streamline the process by consolidating payer requirements and automating the submission of PA requests. 

This can help reduce the administrative burden and ensure that providers are submitting accurate and complete information to each payer.

2. Streamlining Inconsistent Workflows Between Payers and Providers

Another significant challenge is the inconsistent workflows between payers and providers. Inefficient workflows can lead to delays, errors, and frustration for both payers and providers. 

To get these workflows running smoothly, providers should focus on implementing electronic prior authorization (ePA) solutions that automate the PA process which will ensure seamless communication with payers.

ePA solutions can significantly reduce the time and effort required to submit and track PA requests, as they often include features such as real-time eligibility checks, automated data entry, and electronic submission of supporting documentation. 

By harnessing the power of ePA, providers can improve the efficiency of their PA management processes and enhance collaboration with payers.

3. Keeping Up with Evolving Payer Rules

The rules and regulations of insurance companies are continuously evolving. This content update makes it a mandate for providers to stay up to date with the policies and the guidelines of the payers. 

This may involve subscribing to industry publications, attending webinars or workshops, or engaging with payer representatives to stay informed about the latest developments.

The providers should also consider implementing a robust compliance management system that can help them track and respond to changes in payer rules and regulations. 

This can include features such as automated alerts, policy updates, and compliance reporting to ensure that the organization remains up-to-date and compliant.

4. Importance of Skilled Personnel in Managing PAs

Effective PA management requires skilled personnel who can navigate the complex process efficiently. 

Providers should invest in training and development programs to ensure that their staff are equipped to handle the demands of PA management. 

This may include providing ongoing education on payer requirements, PA submission best practices, and strategies for managing denials and appeals.

Preauthorization Benefits of Automation

Automation has become a part of almost all the domains and workflows. Automation in PA authorization can significantly improve the PA process and can enhance the overall practice productivity and revenue.

How Automation Speeds Up the PA Process

Automation significantly speeds up the PA process by eliminating manual workflows and reducing the need for manual data entry. 

Electronic prior authorization (ePA) solutions can automate the submission of PA requests, reducing the time spent on PA reviews and improving the overall efficiency of the process. This can lead to faster patient access to care and improved patient outcomes.

Reducing Administrative Workload and Medical Errors

It reduces the administrative workload associated with PA by automating routine tasks such as data entry, eligibility checks, and submission of supporting documentation. 

This can help reduce the chances of medical errors and improve the overall quality of care. Automation also helps to reduce the administrative burden on staff, freeing them up to focus on more value-added tasks.

Real-Time Data Insights and Improved First-Submission Success Rates

Automation can provide real-time data insights into the PA process, enabling providers to track the status of PA requests and identify areas for improvement. 

This can help improve first-submission success rates by ensuring that all necessary information is captured and transmitted accurately. 

Real-time data insights can also help providers identify and address potential issues before they become major problems.

Enhancing Overall Practice Productivity and Revenue

Automation enhances overall practice productivity and revenue by reducing the administrative burden on staff and improving the efficiency of the PA process. 

By automating routine tasks and reducing the need for manual data entry, providers can reallocate staff to more value-added tasks, improving overall practice productivity and revenue.

Choosing the Right Outsourcing Partner for Prior Authorization

Outsourcing PA management to a reliable partner can significantly improve the efficiency and effectiveness of the process. But how would you choose from so many of them?  Well, we have jotted down some key considerations. 

Here are some key considerations and questions to ask potential PA management vendors to ensure a successful partnership.

Key Considerations

Choosing a Prior Authorization Partner

Experience and Expertise:

Make sure that the outsourcing partner has decent experience in managing PA processes and a deep understanding of the healthcare industry. Handling complex PA requirements and ensuring compliance with regulatory standards should not be a difficult task for them.

Technology and Automation:

The partner should invest in the latest advancements in technology, such as electronic prior authorization (ePA), to streamline the PA process and reduce administrative burdens.

Organizational Alignment:

Any outsourcing partner who shares a similar mission, culture, and values with your organization is the one for you. They should be able to perform the work themselves and not subcontract to other organizations.

Ongoing Training and Education:

The partner should provide ongoing training and education to their staff to ensure they are current on the latest guidelines, rules, and practice standards. This helps maintain high accuracy rates and minimizes denials.

Reputation and Credibility:

Verify the partner’s reputation by checking references, asking for case studies, and ensuring they have worked with organizations of similar size and complexity.

Questions to Ask Potential PA Management Vendors

  • What are your success stories?
  • What technology do you use for PA management?
  • Do you use electronic prior authorization (ePA)?
  • How do you ensure data security and compliance with privacy standards?
  • How do you handle complex PA requirements?
  • What is your process for handling denials and appeals?
  • How do you ensure compliance with regulatory standards?
  • What kind of training and education do you provide to your staff?
  • How do you ensure they are current on the latest guidelines and rules?
  • Do you offer ongoing training and education?
  • What is your reputation in the industry?
  • Can you provide references or case studies?
  • Have you worked with organizations of similar size and complexity?


Prior authorization (PA) is a crucial component of healthcare, ensuring that patients receive appropriate and timely access to medications and treatments. 

However, the manual process of  PA can be time-consuming, labor-intensive, and prone to errors. Outsourcing PA management to a reliable partner like ProMantra can significantly improve the efficiency and effectiveness of the process.

Key Benefits of Outsourcing Prior Authorization Services

  • Improved First-Pass Approval Rates: ProMantra’s industry-leading first-pass approval rate of 98% results in fewer denials and resubmissions, leading to faster access to care for patients and improved cash flow for practices.
  • Increased Revenue: By minimizing denials and delays, ProMantra helps providers capture the revenue they deserve for their services, potentially increasing revenue by up to 25%.
  • Improved Efficiency: ProMantra’s streamlined process ensures that prior authorizations are handled efficiently, reducing administrative burdens and allowing providers to focus on patient care.

Reach out to us today to learn more about how ProMantra can help you achieve industry-leading standards and key performance indicators. 

Our dedicated team is ready to help you navigate the complexities of PA management and ensure that your healthcare organization thrives in a competitive market

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