(Management Case Study) Centralization of Prior Authorization Services at a Hospital-Based Infusion Clinic

Purpose: Denials can negatively impact healthcare institutions and patients by imposing financial burden, delaying operations, and decreasing efficiency. Infusion clinics are susceptible to repercussions secondary to increasing medication costs and payer conditions like site restrictions, diagnosis coding, and therapy tiering. Trinity Health Muskegon (THMU) operates hospital-based infusion clinics in Western Michigan, servicing ~8,000 patient visits annually. Operational gaps contributed to a significant denial burden and posed organizational financial risk. THMU centralized authorization and benefit verification by deploying Financial Coordinators (FCs). The goal of this initiative was to evaluate the impact of centralizing prior authorization services at THMU infusion clinics.

Methods: A multi-disciplinary group conducted a formal rapid improvement event to address workflow and quality concerns within the outpatient infusion clinic. The group identified benefit verification and authorizations were handled within the provider offices with high variability, inappropriate coding, preferred formulary nonadherence, and were lacking communication channels to address issues. Beginning in fiscal year 2023, pharmacy administration incorporated a team of two FCs at THMU. Treatment authorization responsibility was transitioned from provider offices to internal, centralized positions.
A retrospective cohort data review compared the financial impact of pre- to post-centralization of benefit authorization services. Data was obtained from the organization’s Revenue Integrity department and included claim and denial information of adult patients treated at THMU infusion clinics. Non-participating payor claims were excluded. The team categorized denied claims using Claim Adjustment Reason Code (CARC) to determine FC workflow impact on the denial.
The primary endpoint was the change in the number and cost of denials related to FC workflow by CARC code. Secondary endpoints included the change in the number and cost of all initial denials, denial type by CARC code, and the success of local denial recovery efforts (cost and number) post centralization. A post-hoc analysis was performed to identify changes in total number and cost of denials by medication and payer. Descriptive statistics were utilized to report observed changes pre- and post-centralization.

Results: The primary endpoint, FC workflow-related difference in number and cost of denials between pre-centralization and post-centralization, was 433 denials (68% reduction) totaling $1.4 million (63% reduction). The secondary endpoint, all initial denials regardless of FC, was reduced by 1,138 denials (50% reduction) totaling $3.8 million (47%) in cost reduction. Among the top 10 most common denials by CARC codes, four were impacted by FCs and declined dramatically after implementation. Local denial recovery efforts to date total 40 recoveries valued at about $200,000 and an estimated $190,000 in patient savings. Medications most impacted by FC implementation were omalizumab, infliximab, vedolizumab, and ocrelizumab cumulatively reducing medication denials by $2.8 million.

Conclusion: In conclusion, the centralization of authorization services and implementation of FC’s into THMU’s infusion network significantly reduced the number and cost of preventable denials. Additionally, FCs significantly impact recovery efforts after initial denial receipt.