Each time a healthcare provider orders a patient to undergo a new test or procedure, a complex administrative process kicks off known as “prior authorization.”
Though generally invisible to patients, prior authorization is the critical step that takes place before a care encounter to establish agreement with insurance on the necessity, and coverage, of the intended procedure.
Earlier this month, Lumedic kicked off a groundbreaking project to leverage blockchain technology to streamline the prior authorization process for Providence St. Joseph Health (PSJH). The project is a major step forward in a comprehensive effort by Lumedic to improve the efficiency of not just prior authorization, but the entire revenue cycle management process.
I am looking forward to discussing the project at the HIMSS & Health 2.0 European Conference in Helsinki, Finland on June 11.
Our project is a direct outgrowth of PSJH’s acquisition of Lumedic last February. PSJH operates 51 hospitals and 829 clinics in 7 states and treats more than 5 million patients annually. Those treatments generate more than 20,000 prior authorization requests every month, which produce huge costs and major inefficiencies for a large healthcare provider such as PSJH. It also causes stress and pain for thousands of patients waiting for treatment.
We believe we can improve the prior authorization process for PSJH in two critical areas. First, based on our initial review, roughly 40 percent of all treatments that are submitted for approval at PSJH end up not requiring an authorization — but it takes significant time and effort to make those determinations. We believe we can generate major efficiencies by automating those “no authorization” decisions.
When a treatment does require prior authorization, healthcare providers must initiate a second process with health insurers to determine if the treatment will be covered based upon the procedural code and, in many cases, medical necessity. This can get complicated quickly when a provider must interact with hundreds or thousands of different insurers.
Blockchain technology offers great potential to improve this aspect of prior authorization by establishing a trusted environment where healthcare providers and insurers can safely, securely and quickly exchange sensitive patient data so treatment can proceed.
Because PSJH is both a healthcare provider and an insurer, it offers an ideal environment to test and validate Lumedic’s approach to improve revenue cycle management by streamlining the way payers and providers exchange information.
We are optimistic that Lumedic will be able to significantly reduce the number of prior authorizations in the PSJH system and lower the time required to secure approvals. We are also optimistic that we can help reduce write-offs for treatments that were delivered without obtaining a required prior authorization.
Most importantly, these changes will reduce the time it takes for patients to receive the care they need.
We look forward to reporting on our progress in the months to come. In the meantime, if you will be in Helsinki for the HIMMS & Health 2.0 European Conference, please come by our panel on the 11th and say hello.