The HIPAA X12-278 could emerge as a vital catalyst in the evolution of value-based care
Whitepaper | Craig Knier
Assistant Vice President, Product Management Innovation and Strategy Change Healthcare
Craig is responsible for the inception, creation, and delivery of solutions within the Decision Support business. He is currently working on Artificial Intelligence, Machine Learning, and Advanced Analytics strategies.
Value-based care requires eliminating unnecessary healthcare costs while ensuring patients receive the right care at the right time. Yet in today's transitional environment, providers and payers struggle with health IT infrastructures that are often incapable of supporting the high-velocity collaboration and communication critical to achieving these goals
Those shortcomings are painfully apparent in the realm of prior authorization. Emerging 30-plus years ago as a component of managed care, prior authorization was developed to help payers control costs by identifying unnecessary medical interventions. In practice, prior authorization has proven to be a cumbersome, labor-intensive process that generates enormous administrative burden for providers and payers, while contributing to treatment delays and undermining payer-provider trust.
The good news is that existing technologies present an opportunity to break the logjam surrounding prior authorization. By modifying the existing HIPAA Healthcare Service Review X12-278 transaction standard to share clinical data, a new hybrid communications tool can be deployed to standardize, streamline, and largely automate prior authorization throughout the industry.
The humble 278 could enhance payer-provider collaboration and ultimately emerge as a vital catalyst in the evolution of valuebased care.
A Broken System
The inefficiencies that plague prior authorization stem largely from the outdated processes used to convey information. By some estimates, 90 percent of all prior authorizations continue to rely on phone or fax communications, and neither approach is well-suited for clinical data sharing1.
Because multiple phone calls often accompany an authorization event, details can be missed, and misunderstandings are a constant risk. Fax communication is also inadequate. Providers tend to err on the side of caution by shipping all potentially relevant documents. This can make it difficult for payers to sort out the specific evidence they need.
Some providers have implemented systems that allow payers to access electronic health records (EHRs) in pursuit of authorization documentation. But this solution can also be less than optimal. Payer IT infrastructures typically contain a range of siloed applications that are not equipped to aggregate and integrate healthcare clinical data. These problems are often compounded by data quality and terminology gaps that further undermine compatibility2.
Allowing an external party EHR access may also raise additional concerns. For example, it is possible that the payer may identify previously unknown information that undermines the authorization request.
Creating an Intelligent 278
The 278 Healthcare Service Review transaction protocol was meant to eliminate these inefficiencies by enabling electronic authorization requests from provider to payer and by alerting providers when authorizations were approved or pending. Static fields allow providers to convey basic financial and demographic information as well as limited clinical data, including diagnoses and requested services.
The 278 cannot deliver the clinical details needed for authorization determinations, however. For that reason, the standard has gone virtually unused since it was incorporated into most practice management systems beginning in the early 2000s.
Industry leaders believe an opportunity exists to modify the 278 standard so it can finally fulfill its original design intent. By incorporating electronic pointers into the transaction content, provider systems could automatically direct payer utilization management systems to the external resources required to reach an authorization decision. These could include medical appropriate reviews, order templates, or laboratory and imaging results.
Creating standards to ensure these pointers are dynamic and effective will require a change in thinking, since unactionable, attached documents won't do the job. That work is already under way. Both the WEDI and CAQH organizations have created specific prior authorization workgroups to address the problem. Additionally, the American Medical Association has published a paper outlining principles for improving prior authorization³, and the provider community under the FHIR/HL7 group has begun reviewing the authorization process to improve clinical and fiscal data exchange.
Industry leaders believe an opportunity exists to modify the 278 standard so it can finally fulfill its original design intent.