The 21st Century Cures Act Will Enable Better Utilization Management 


This blog is the second in a series that aims to provide insights for payers as they prepare for Provider Access API requirements. Read the first blog.

Utilization management (UM) has traditionally existed on the payer or employer side of the payment equation. More recently, hospitals are recognizing that their ability to manage utilization for their patients results in better care and fewer claim denials and audit recovery findings. In fact, hospitals have started incorporating UM into revenue cycle management to ensure that the services they render are appropriate and will not be denied by payers. 

Requirements of the 21st Century Cures Act such as the Provider Access API and the Prior Authorization Requirements, Documentation and Decision (PARDD) will enable better utilization management by payers and providers in a number of important ways. In this article, we’ll explore how these  Cures Act requirements will move UM forward.

UM Requires Complete Patient Information

Documentation of medical necessity is an essential component of the UM process, yet UM programs often operate with incomplete information because some of the patient’s medical history occurred in a different health system or timeframe. This is especially true of patients new to a payer. The exception is when a provider is connected to a health information exchange (HIE).

Current UM processes are a series of manual processes that include faxes requested by the UM team to review clinical records, lab values and other documentation. Additionally, on the provider side, UM currently only has visibility into the services provided for that particular provider system. The Provider API will change this by enabling a single provider system to get a longitudinal patient record for clinical medical necessity review, quality of care audits and more. 

Streamlining Prior Authorizations

Patient medical care requires assessing the appropriateness of medical care based on clinical guidelines. Clinical guidelines can include purchased guidelines like Change Healthcare’s InterQual, MCG’s Cite CareWebQI, governmental agencies like, or clinical specialty associations like the American Academy of Family Physicians.

In most cases, payers put prior authorization requirements in place before services can be received by the patient. If the authorization is not approved, the provider or patient will need to assume responsibility for the cost of the services.

In recent years though, there has been a lot of pushback on the payers about delays in care due to requirements for prior authorizations. Several states have adopted gold/white card program legislation, which exempts physicians who have a 90% prior authorization approval rate over a six-month period on certain services from prior authorization requirements for those services.

A Kaiser Family Foundation study found that 94% of prior authorizations were approved in Medicare Advantage plans that are required to submit that information. This finding aligns with data from other payers that have measured rates of approval in their own populations. While only 11% of denials are appealed, over 82% of those appeals were successful in having the denial partially or completely overturned.

Centers for Medicare & Medicaid Services (CMS) proposed rules require that payers must provide a Prior Authorization Requirements, Documentation and Decision (PARDD) API that will help automate the prior authorization process and make it readily available for integration into a provider’s electronic health record (EHR). The proposed automation will ultimately improve efficiency for both payers and providers while also improving the transparency of prior authorization rules.

How HealthLX Can Help with UM and Cures Act Compliance

HealthLX recognizes that while the proposed automation will improve prior authorization efficiencies, the industry transition will likely take years to complete. Payers will not only need to implement the PAARD capabilities but will also need to support a mixed mode of operations during this transition including phone, fax, portal and HL7 ADT methods. HealthLX is working with payers as they plan their system implementations including data integration and complex API orchestration to support this transition.

HealthLX can also help payers comply with the new proposed rule by helping them build a Provider Access API and a PARDD API that automates the prior authorization process. To learn more, request your personal demo today.

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