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What is Prior Authorization and how does it affect the RCM?

We all know the importance of Prior Authorization (PA) and how it plays a direct role on the provider’s collections. The American Medical Association defines PA as, “Prior Authorization is the process by which physicians and other healthcare providers must obtain advance approval from a health insurance plan before a specific procedure, service, device, supply or medication is delivered to the patient in order to qualify for coverage.” A survey suggests that providers spend an average of 20 hours a week on the prior authorization process. No wonder providers lose revenue on missing or invalid auth.

Before moving on to the impact, let us first understand why payers demand to go through the Prior Authorization process for various services provided by physicians.

  • To ascertain the medical necessity – Providers will need to show medical necessity for the course of treatment.
  • To determine the quality of treatment – If there is a need to provide a certain treatment over and above the actual time period, there is a need to determine the effectiveness of the provider’s treatment during the initial period.
  • Avoid duplication of services – A patient may be consulting different specialists for a particular diagnosis, In this case, the service/drugs provided by one physician cannot be provided by another within a period of time. Here the payer will check if the physician took time to review all the previous records of the patient prior to prescribing the same treatment/drugs.
  • Cost saving – A physician may provide/prescribe an expensive treatment/drug when there is a cheaper or cost-effective alternative available. In such cases, payers demand Prior authorization to determine the medical reason for the same.

In a way, the Prior Authorization process is to keep a check on the quality of care provided by Physicians and to make sure the care is necessary, safe, accessible, and cost-effective. An important point to be noted here is that healthcare providers need not follow the prior authorization process in the case of emergencies. In some cases, the provider will go through the Prior authorization process post care which is also called retro-authorization.

Let us see some need-to-know facts about Prior authorization from a survey conducted by the American Medical Association.

  1. 93% of physicians reported that care got delayed due to the process of obtaining PA.
  2. 82% report that PA can at least sometimes lead to treatment abandonment.
  3. 24% of physicians reported that PA has led to a patient’s hospitalization.
  4. 2 in 5 physicians say that they have staff employed exclusively for obtaining PA.

These facts simply state the fact that Prior Authorization has a direct impact on both the quality of care and the physicians’ s revenue. An ineffective Prior Authorization process affects a practice’s RCM in the following ways

  • Increased denials
  • Increased write-offs
  • Increased Patient responsibility
  • Increased provider liability
  • Deployment of extra resources to manage the process


Quintessence understands how tedious the Prior Authorization process can be for providers. This process is something that needs high priority but at the same time, a very high time-consuming process that is not affordable by providers.

QuintAna by Quintessence is a series of BOTs that has been automating different scopes of the Revenue Cycle Management including the Prior Authorization process. QuintAna is custom-built for different practices to suit their respective needs. The BOTs can be programmed to identify services and procedures (through edits) that require Prior Authorization and can automatically go into the payer website and fetch the PA number for the patient. If PA is not available, the BOT automatically pushes such claims to the calling team.

With the help of QuintAna, practices can reduce the time spent on the Prior Authorization process by up to 65%. The BOT works independently from your PMS hereby we can immediately deploy the BOT and have it up and running in no time! Getting the best for RCM is now made possible with QuintAna by Quintessence.