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CloudView blog

Ideas and insights to help health care providers stay informed and profitable in today's challenging health care environment.

Can We Fix the Broken Authorizations Process? Humana and athenahealth are Leading the Way

by Kimberly Hui, athenahealth Payer Transactions Associate, and Kim Peters, Humana Process Owner for Integrated Provider Solutions

Providers and their staff spend 20 hours per week providing necessary paperwork to payers – and that doesn’t include the time spent retrieving and preparing those documents. Authorizations cost the US health system $23 to $31 billion a year  in administrative costs alone. Providers, staff, patients, and payers alike are impacted by the long phone hold times; complex requirements and adjudication; and back-and- forth exchange of clinical information. Patients can only wait and hope that a determination will be made before their critical surgery can be performed.

Sadly, this scenario is expected only to become more common as healthcare costs rise, the market moves toward risk-based models, and payers look to control utilization and costs. However, two currently under-utilized Electronic Data Interchange (EDI) transactions offer both immediate relief and long-term potential to automate the authorization process.

Since 2014, athenahealth has partnered with Humana, a national commercial and Medicare and Medicaid payer, to pilot innovations in the authorization process.  By leveraging Health Services Review (HSR) transactions 278-215 and 278-217, athenahealth and Humana were able to streamline and simplify elements of the authorization process in a pilot study by enabling electronic initiation of new pre-certifications and referrals between providers and payers and electronic inquiries into a payer’s system about existing precertifications and referrals.

Today, the authorization process required to get a specialists’ procedure authorized for a patient looks something like this:


1. The specialist, in this case an orthopedist, puts in an order for knee surgery.

2. The orthopedist’s staff calls the patient’s insurance company to verify benefits.  Staff initiates the precertification process by providing diagnosis code, procedure code, proposed dates of service, and facility information for the requested surgery.

3. The payer receives the above information and after reviewing for a period of time (often several days), sends the precertification to be reviewed by staff. Meanwhile…

4. The provider’s office or the patient repeatedly calls or logs into a portal to check the status of the precertification with the payer. And once the staff has received the precertification…

5. The provider may need to gather and submit further documentation to the payer. Staff will continue to call the payer or check the portal until a determination has been made.

Even if you haven’t experienced this process firsthand or witnessed someone else go through it, the schematic is pretty clear: The current process for obtaining authorizations is broken.

With the power of HSR transactions 278-215 and 278-217, Humana established a more streamlined authorization process which looks like this:


The 278-217 request transaction allows patient insurance and procedure information to be sent to the payer in an ANSI-standard transaction, and payers respond to providers in real-time with confirmation of authorization requirement, case numbers, and status. The 278-215 inquiry transaction allows for real-time follow-up and retrieval of information on an existing request opened with the payer retrieving the determination within the hour of when it’s made.

The results of the pilot study were stunning:

  • 83.9% of precertifications and 99.6% of referrals were automated completely with one HSR transaction, allowing staff to focus on getting complex procedures approved.
  • HSR transactions eliminated all manual follow-up work and returned determinations in less time.
  • With HSR transactions, 34.8% of all appeal work could be eliminated and the remaining work can be more easily managed.

The HSR 278 transactions were able to improve turnaround time, reduce phone calls, improve data quality transferred, and as a result, reduce authorization appeals. This made significant progress in reducing the cost and manual burden of researching, requesting, and following up on authorization requests while improving accuracy of information exchanged. HSR transactions also reduced costs for all parties by eliminating many of the phone calls necessary in the authorization management process. As a result, participants in the pilot study realized significant monetary, time, and quality benefits to their authorization process by embracing the HSR transactions.

While HSR 278 cannot eliminate all manual work, it eliminates the work that is most time consuming, standardized, and least valuable. This allows practice staff and payer call centers to focus on the work required that varies from case to case – discussing medical history and necessity for procedures. It also establishes an automated process for authorizations, laying the groundwork for when an industry standard transaction for clinical documentation automation becomes available. 

athenahealth and Humana are excited to share the immediate and significant cost, time, and quality improvements that payers and providers could realize by adopting HSR transactions. Most importantly, our organizations want to emphasize the power of these transactions to overcome healthcare’s authorization burden and help patients get the care they need, when they need it.

Interested in embracing HSR transactions yourself?  Read the full case study of athenahealth and Humana's pilot here.  Contact to learn more.

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