Prior authorization is an integral part of medical diagnosis and procedures, especially when the claims are to be settled by an insurance company.  It is the process of getting a approval from the insurance carrier to treat specific services. Ensuring a nod from the payer beforehand means there are brighter chances of a hassle-free claims’ settlement. The process entails procuring an authorization number that has to be included on the claim during submission. 

While it may sound simple, the process of prior authorization in fact entails lot of hassles. It is mandatory for providers to be aware of the preauthorization guidelines and coverage for payers and furnish the particular diagnosis on the reports. It is based on this information that the correct diagnosis codes can be included basis which the provider can tell the payer the reason for which the service has to be performed and the medical necessity of the procedure. 

Problems Faced in Prior Authorization 

Even though insurers authorize most requests, the process is sometimes very lengthy and involves administrative hassle of endless paperwork, repeated phone calls and mounting claim piles that can disrupts or delays a patient’s access to vital care. The common problem faced by all medical billing companies is long waiting time before the approval of the prior authorization. A recent report from American Medical Association found that 64% of providers reported waiting for at least 1 business day and 30% reported at least 3 business days. The same report revealed that about 84% reported that prior authorizations lead to high or extremely high administrative and 85% agreed that provider issues with prior authorizations increased in the last five years. 

Foremost Task: Ensure the CPT code is Correct 

Robust preauthorization entails capturing and providing the correct CPT code. However, it is important to identify the exact procedural code before administering the service to the patient and documented. Though this is indispensable for clean claims, it is quite a difficult task. The best way to ensure the code is correct is to get in touch with the physician and understand how they want to carry out the treatment. Having a clear idea of all the likely scenarios; will ensure the procedure is performed. For instance, a doctor might plan for a biopsy but actually carry out a lesion. In such a case the claim will be denied. As a practice authorizing treatment not administered should be more preferred than payment denials for no authorization.  

In some cases, the patient coverage may not be available before the procedure. This mostly happens in emergency situations, due to a sudden illness overnight or an accident. In such scenarios, the provider must make it a point to get in touch with the payer at the very first interaction and secure necessary authorizations. 

Best Practices for Prior Authorization: 

The scale of medical billing processes is set to grow by leaps and bounds in the US and so prior authorization will have a key role to play in ensuring the process runs on track. Below, we enlist some of the best practices for pre-authorization:

Keep Necessary Information Ready :

It is important to have all relevant information about the procedures that providers routinely perform. This information can be unerringly keyed into the contracting process. At the same time there has to be adequate evidence to prove the medical necessity of particular procedure. These two together will ensure there are no hassles during reimbursement process. 

Follow recommended treatment guidelines:  

Every expensive procedure has its own recommended treatment guidelines. Further, the guidelines vary from payer to payer. Physicians must be aware of these guidelines and should make sure they are adhering to the recommended treatment guidelines before carrying out a high-cost procedure for a patient. A clear communication mode between the billing team and physician before the procedure can help sort out confusion if any and spare many a claim related hassle. 

Meet all Payer Criteria:  

Payer criteria varies from payer to payer. National payers have a different set of criteria than regional payers and local payers. Therefore, having firsthand knowledge of payer criteria is vital. AN end-t-end knowledge of payer criteria will ensure providers meet all of the payer’s criteria before submitting a prior authorization request. This way the decks stand cleared for getting the claims settled without any issues.  

Get Preauthorization for Mundane Procedures:  

Focusing on prior authorization for complicated procedure and ignoring the mundane ones is a wrong approach. Prior authorization agents must ensure that they seek prior authorization even for the mundane ones. For instance, the two most common procedures that providers must seek preauthorization from insurers are imaging processes such as magnetic resonance imaging (MRI) and computerized tomography (CT) scans and brand-name pharmaceuticals. 

Monitor Insurance Carrier Websites Regularly:  

Insurance carriers keep changing their requirements often. Though they keep providers updated on the changing rules or requirements it always pays to be proactive and check it out on their websites. If the practice is carried out routinely it will help identify issues. For instance, any tweak in rules that can possibly affect patients can be conveyed to the patient at the onset so that they can take it up with their insurance carrier and resolve issues at their end. This can spare many a trouble for the provider. 

Update Contracts with Insurance Companies:  

Insurance companies update their contract on a regular basis. Payer contracts include reimbursement requirements and fee schedules as well as all the conditions providers must meet for timely reimbursement. To get on top of these updates, it is important for providers to update their contracts time to time. Therefore, it pays to train prior authorization agents and medical billers to understand the basics of payer contracts, and the contract language. 

Streamline Pre-authorization Process:  

Every provider must streamline their prior authorization process to make sure it is carried out most efficiently. The best way is to focus on the top 10 to 15 payers. To streamline the process it is vital to build informational summaries (preferred means of contact, specific requirements, etc.) for each payer that is made easily accessible to staff. Automating the process of tracking prior authorization submissions and associated results can be very helpful in optimizing the process and making it less dependent on manual efforts.  

Have Specific Templates: 

Yet another good way of optimizing the process is to build payer specific and procedure specific EHR clinical templates to simplify the capture of necessary clinical documentation guidelines. Using ASC X12 278 Health Care Services Request functionality, if available, to submit and receive the results of prior authorization requests can also be very helpful to your staff. 

Have Process-Driven and Proactive Policies:  

A process driven prior authorization policy will help a provider submit prior authorization requests and supporting documentation as per the guidelines. The objective is to submit just what is required and dot on time. Likewise, the process must include date and time stamp all submissions and set up a formal follow-up policies. As provider need to be prepared for a denial too, developing and maintaining standard letters of appeal for use helps to make the process fast and more efficient. 

Review and Analyze: 

It’s very important for providers to have a prior authorization review process in place. Proper analysis of prior authorization results helps in gaining better understanding of what types of care post risk of denial. This risk can also be categorized based on payers. Such analysis also helps to identify how efficient your staff is in getting approvals along as well as the approval rates. Time to time analysis helps to identify and implement operational changes and build best practices around successful submissions. 

Communicate and Educate:  

Prior authorization process is driven by guidelines that are continuously changing. Your staff must be abreast of these changes. To ensure this a provider must facilitate periodic meetings with staff and even have a forum related to prior authorizations. Encourage preemptive discussion on primary and alternative plans of care if there are potential delays in getting prior authorization. Besides, other new and unique problems can also be discussed in the forum to keep all stakeholders involved in prior authorization well informed.  

Conduct Regular Audits:  

Like other critical medical processes, the prior authorization process should also be subjected to regular audits. Routine audits can detect issues and help identify the reason for prior authorization denials. This will enable providers to nip minor problems in the bud and have proper control over the pre-authorization process. The audits must also focus on how accurately the diagnosis codes have been captured. 

Why Outsourcing Prior-Authorization is the Best Option 

outsourcing medical billing services

Outsourcing prior authorization services to third party partners is always the best option because of a number of reasons. The fact that standardizing best practices for prior authorization could take years, and given that it involves multiple, complex steps, advanced technologies like in-house automation may not quite effectively optimize workflow efficiencies. In the past outsourcing was primarily done as a cost-cutting strategy. However, over the year the benefit of cheaper costs has been replaced by operational efficiencies and sustained growth. Modern third-party vendors are ensuring this with the help of strategic thinking and innovations to complex processes, thus giving providers the room to focus on their core services and compete more effectively in a fast-evolving market. 

When providers and top medical billing companies bank on outsourced services for pre-authorizations, they rely on a third-party to act as a enabler between their practice and the payer. The partner collects relevant information from the provider and then approaches the carrier to obtain pre-authorization for both outpatient and inpatient procedures, as well as pre-certifications for treatment admissions. 

Third-party service providers are healthcare BPOs who rely on a streamlined and centralized process to reduce data errors. Almost all third-party vendors specialize in all pre-authorization works and so know the process like the back of their palms. This understanding and specialization gives them the edge over inhouse staff. 

Some Facts Worth Considering: 

1. Payer-specific preauthorization requirements and payer decision confirmation are commonly marked by several inconsistencies and errors. individual practices find these variations to complex to handle which is why outsourcing comes into play. A specialized third-party vendor has proper methods in place to keep their staff updated with latest rules and compliance. These additional efforts go a long way to ensure that requests don’t fall through procedure gaps. 

2. When large practices handle their own pre-authorizations, they need to have well defined roles along with established and seamless channels of communications with physicians. More often than not it leads to lot of distracting issues. However, by outsourcing companies eliminate these major bothers 

3. Yet another big problem with inhouse pre-authorization is procedural issues. The commonly defined procedures are mostly manual and tedious, consisting of tons of information all of which need to be kept in mind at the same time. Specialized third-party service providers have a centralized procedure which is again driven by a robust computer-based process. Given that they specialize only in handling prior authorizations, they have streamlined processes that ensure better and faster results. With efficiency assured, healthcare providers can make the most of their processes. 

4. According to industry reports, the cost of pre-authorizations lies between $30 and $80. To top it, agents handling the process need to spend up to 9 hours every week just on responses on hold. All this can add up to lot of wasteful expenditure. Much of this can be eliminated with outsourcing, because pre-authorization services are priced in varied ways depending on the requirements. As most outsourced partners charge on a per-enquiry basis even small clinics can make use of their services without having to bother about heavy expenses. 

Who We Are and What Makes Us an Expert? 

This article is brought to you by MedBillingExperts, one of the best medical billing companies in the US. We have extensive experience in helping large and small healthcare providers to streamline their billing practices and make it steadier and more reliable. Over the years, we have served diverse clientele comprising sole practice physicians, hospitals and medical centers, physical therapy companies, MRI centers, laboratories, nursing homes, durable medical equipment providers, radiology centers, home healthcare companies, and ambulance services. Our clients have leveraged our medical billing services to make their revenue cycle process more responsive and productive.  


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