Prior Authorization Toolkit
Faster payer responses, smoother transactions, better service
Prior authorization transactions can be slow and tedious. Your practice’s time is better spent providing attentive medical care and responsive customer service. Handling your prior authorizations electronically can:
- Speed up health insurer response
- Minimize time and resources devoted to manual processes, such as waiting on hold and compiling faxes to payers
- Free up time for revenue-enhancing functions such as ensuring correct payment
- Reduce transaction costs by over 80%
Cost of conducting manual prior authorizations: $10.78 x 200 = $2,156
Cost of conducting electronic prior authorizations: $2.07 x 200 = $414
Average annual savings per physician from automating prior authorization: $1,742*
* Based on an annual average of 200 transactions submitted for a single physician. Source: Milliman, Inc., “Electronic Transaction Savings Opportunities for Physician Practices.” Technology and Operations Solutions. Revised: Jan. 2006
Calculate your potential savings: View Aetna’s EDI savings calculator
By eliminating significant parts of the manual processes in an office’s routine, physicians can free their practice staff to perform other revenue-enhancing functions. Access the following educational resources “Information technology solutions: consider the potential savings” and determine your practice’s potential savings.
Access the AMA resource “Understanding the HIPAA standard transactions: The HIPAA Transaction and Code Set rule” for an overview of electronic healthcare transactions.
- Beyond the Claim: HIPAA 5010 Administrative Simplification Opportunities to Positively Impact your Revenue Cycle Management
- The "underutilized" transaction that can streamline your referral and prior authorization processes
Take the brief Health Insurance Portability and Accountability Act (HIPAA) Transaction Code Set Vendor Survey to easily find out whether your vendors can process electronic claims and other healthcare transactions.
Visit 5010 electronic administrative transactions for more information on assessing 5010 readiness.
“Considerations for processing electronic transactions in the physician practice” offers specific scenarios of how your practice might adopt electronic claims submissions, and provides additional considerations for your specific situation.
Because of the significant savings of time and revenue that can be achieved by physicians through automation of the claims process, the AMA diligently advocates for continued administrative simplification. Today, the prior authorization process is all to often manual, time-intensive and confusing for all stakeholders. The AMA believes that the best automated solution for prior authorization would be a single, standard electronic PA process applicable to all service types that include medical, pharmacy, laboratory, radiology and durable medical equipment (DME) services to reduce the administrative burden placed on payers and physicians alike.
Visit www.ama-assn.org/go/payerpolicies to access online resources from health insurers to help you move towards practice automation.
The suite of electronic health care transactions are designed to work together to create greater efficiencies for both physicians and health insurers. By adopting an integrated approach to using the electronic health care transactions, information gained from one transaction becomes useful information in the next transaction.
- Did you know that the increased use of electronic health care transactions in your practice, such as the electronic eligibility benefit inquiry and response transactions, has the potential to save physicians and health insurers nearly $30 billion per year? 
Access this case study to learn more about the savings your practice can experience using electronic health care transactions.
 U.S. Healthcare Efficiency Index, www.ushealthcareindex.com .
“Questions to ask a health insurer before enrolling in an electronic transactions program” outlines key issues with using electronic claims submissions that you need to carefully consider.
“Questions to ask a billing service before enrolling in an electronic transactions program” provides key questions to discuss with your billing service to understand how it can assist you in using electronic claims submissions.
“Questions to ask a clearinghouse before enrolling in an electronic transactions program” provides key questions to discuss whether your clearinghouse provides satisfactory functionality for electronic claims submissions.
Learn more about the AMA’s efforts to reduce the cost of getting paid accurately down to just 1% versus the current expenditure of 8-14% of revenue to just get paid accurately. Access the “Standardization of prior authorization process for medical services” white paper for more information on AMA’s efforts to push for a standard and streamlined automated prior authorization process to reduce those unwanted administrative hassles and hoops to obtain approval to do you’re your practice does best, provide quality care for a patient.
Use the Health Insurance Portability and Accountability Act (HIPAA) complaint form to inform the AMA about health insurers and other payers that are out of compliance with the HIPAA electronic transaction and code set standards.