Optimizing Prior Authorization for Molecular and Genetic Testing Laboratories

06/04/18

Let’s face it—there is frequently an urgency around molecular and genetic testing. When a patient is looking for answers on a cancer diagnosis or a prenatal concern, the stakes are high. But prior authorization requirements loom large in high complexity diagnostics. Two key observations—

  1. The burdens of prior authorizations on laboratory testing are significant: patients are getting held up and even denied for urgently requested tests; the appeals process ties up valuable resources; and ultimately, revenue is lost when tests are conducted and the claims are denied.
  2. Prior authorization for labs is a moving target, but it’s moving in one direction. Requirements have been increasing, and the trend is expected to continue. The solution so far has been to throw more staff at it, but manual processes aren’t effective and aren’t built to scale.

Hospitals and health systems have been dealing with prior authorization workflows (and the resulting denials) for years. But labs are starting to catch up. Over a two-year period, there has been a more than 300% increase in prior authorization related denials for all lab tests.

prior authorization molecular genetic testingIt’s estimated that about 1% of health systems’ revenue is written off due to a lack of prior authorization, but that rate can be dramatically higher among molecular and genetic testing laboratories. And the cash impact per procedure can be around $100 in some cases, so when important tests are denied after the fact in high numbers, costs quickly add up.

When it comes to workflows, laboratories are also in a tough position—some have the ability to submit on behalf of the ordering physician, but many independent labs don’t. In many cases, laboratories depend on the ordering physician’s office to submit a prior authorization request and gain approval. Meanwhile, if a specimen already exists, labs are frequently conducting tests before a prior authorization is approved, which involves risk. Complicating matters, the ordering physician’s office typically doesn’t have visibility into a lab’s process. So, what’s a lab to do?

First, let’s recognize that when we get prior authorizations right, everybody wins. Physician offices don’t get dinged on their patient satisfaction scores, labs don’t have to write off lost revenue due to claims being denied and patients receive timely results to inform the course of their care.

By electronically automating manual workflows, the parties involved can close the loop on a fragmented process. But ordering physicians don’t want a whole new and separate system to learn, and laboratory staff need solutions that integrate with their LIS and work with their workflow automation and revenue cycle management tools. That’s why the winning solution is going to be one that is built around the way labs and providers work and integrates with systems already in place. It’s all within reach for labs that want to automate and optimize their prior authorizations. Contact the PriorAuthNow team to find out how to get a handle on prior authorizations and get back to being a lab.