Recently, the Office of Inspector General (OIG) released a report that illuminated some concerning statistics regarding denial rates at Medicaid Managed Care Organizations (MCOs). The report found that one in eight prior authorization requests were denied by seven large MCO parent companies operating 115 MCOs across 37 states in 2019. More alarming was that 12 of the 115 MCOs had prior authorization denial rates greater than 25%—twice the overall rate.1

These denials not only lead to delays in necessary care but also result in administrative burdens for both providers and patients. Additionally, most State Medicaid agencies do not routinely review MCO denials or collect data on these decisions, making it difficult to address the issue effectively.

To overcome these hurdles, healthcare organizations can leverage predictive analytics, automation, and AI to create a proactive prior authorization process—reducing the burden on patients while enabling timely access to necessary medical care.

Leveraging Predictive Analytics for Proactive Denial Prevention: One key aspect of a proactive prior authorization process is the use of predictive analytics. By analyzing historical data and patterns, predictive models can identify requests that are likely to be denied. This proactive identification allows healthcare providers to take necessary steps in advance to strengthen the authorization request, increasing the chances of approval. Predictive analytics also help in resource allocation, ensuring that limited resources are utilized efficiently.

Automation for Streamlined Processes: Automation plays a vital role in streamlining the prior authorization process. By automating repetitive tasks such as gathering patient information, checking eligibility, and submitting authorization requests, healthcare organizations can significantly reduce administrative burdens. Automation also minimizes the chances of errors, improving the accuracy of the process and reducing delays in care delivery.

AI for Real-Time Decision Support: Artificial Intelligence (AI) provides real-time decision support for healthcare providers. AI algorithms can analyze medical records, evidence-based guidelines, and payer policies to provide instant recommendations on the necessity and appropriateness of a treatment. This real-time decision support helps healthcare providers make informed decisions, ensuring that prior authorization requests align with medical necessity criteria and improving the chances of approval.

Transforming the prior authorization process into a proactive and efficient workflow is achievable for healthcare organizations by leveraging advanced technology atop their existing EMR. By incorporating predictive analytics, automation, and AI, healthcare providers gain the ability to identify potential denials, streamline processes, and receive real-time decision support. This patient-centered approach not only improves compliance but also enhances patient outcomes while reducing costs. Embracing a proactive prior authorization process fueled by technology empowers healthcare organizations to effectively navigate the challenges of MCO denials and deliver exceptional, high-quality care to their patients.


1High Rates of Prior Authorization Denials by Some Plans and Limited State Oversight Raise Concerns About Access to Care in Medicaid Managed Care