Prior authorization is an essential element of medical billing and coding, particularly when claims are to be settled by an insurance company. It is the process of obtaining insurance carrier approval to treat specific services. Getting approval from the payer ahead of time increases the likelihood of a smooth claims settlement. The procedure involves obtaining an authorization number, which providers must include on the claim during submission. While it may appear simple, the process of prior authorizations is fraught with complications. Providers must be aware of pre-authorization guidelines and payer coverage and provide the specific diagnosis on reports. Let’s see what all you need to know about the prior authorizations-
Problems with Prior Authorization
Even though insurers approve most requests, the process can be time-consuming and involves the administrative hassle of endless paperwork, repeated phone calls, and mounting claim piles. This can disrupt or delay a patient’s access to vital care.
According to a recent American Medical Association report, 64% of providers reported waiting for at least one business day, and 30% reported waiting at least three business days. According to the same report, approximately 84% reported that prior authorizations result in high or extremely high administrative costs, and 85% agreed that provider issues with prior authorizations have increased in the last five years.
Approximately 60% of doctors received a response at least within one business day.
The Influence of the Pandemic on the Prior Authorization Process
According to a recent poll conducted by the Medical Group Management Association, 81% of various medical groups have confirmed a significant increase in the regulatory burden of prior authorization requirements since 2020.
Healthcare providers have complained about a lack of staff to deal with the influx of COVID-19 patients. In response to the pandemic, states in the United States asked insurers to temporarily waive the PA requirements. However, every insurer provider has its own set of PA requirements, and many of them were hesitant to accept the waiving appeal.
Furthermore, different states in the United States are taking their own distinct approach to a temporary policy change for PA requirements. This adds to the uncertainty about policy changes being implemented across the country.
First Task: Ensure Correct CPT Code
Capturing and providing the correct CPT code is required for robust pre-authorization. However, the exact procedural code must be identified and documented before administering the service to the patient. Although this is required for clean claims, it is a difficult task. The best way to ensure that the code is correct is to contact the physician and learn how they intend to carry out the treatment.
Having a clear understanding of all possible scenarios will ensure that the procedure is carried out. For example, a doctor may intend to perform a biopsy but instead performs a lesion. The claim will be denied in this case. Authorizing treatment that is not administered should be preferred over payment denials for lack of authorization.
In some cases, patient coverage may be unavailable prior to the procedure. This is most common in emergencies, such as sudden illnesses or accidents. In such cases, the provider must make it a point to contact the payer at the outset and obtain the necessary authorizations.
Approximately 85% of physicians believe the burden of Prior Authorization is high or extremely high.
Prior Authorization Best Practices:
Prior authorization will play a critical role in ensuring the process runs smoothly as the scale of medical billing and coding processes in the United States expands by leaps and bounds. Some of the best pre-authorization practices are listed below:
- Keep Necessary Information Ready:
It is critical to know the procedures that providers routinely perform. Thereafter, they can precisely enter this data into the contracting process. At the same time, there must be sufficient evidence to prove the medical necessity of a specific procedure. Together, these two will ensure no hiccups during the reimbursement process.
- Comply with All-Payer Criteria:
Payer criteria differ from one another. National payers use different criteria than regional and local payers. As a result, first-hand knowledge of payer criteria is critical. A thorough understanding of payer criteria will ensure that providers meet all of the payer’s requirements before submitting a prior authorization request. This clears the way for the claims to be resolved without incident.
- Obtain Preauthorization for Routine Procedures:
It is bad to focus on prior authorization for complicated procedures while ignoring the mundane ones. Prior authorization agents must ensure they seek prior authorization for even the most routine requests. Imaging processes such as magnetic resonance imaging (MRI) and computerized tomography (CT) scans, for example, are two of the most common process for which providers must obtain pre-authorization from insurers.
- Conduct Regular Audits:
Like other critical medical billing and coding processes, you should regularly audit the prior authorization process. Routine audits can detect problems and assist in determining the cause of prior authorization denials. This will allow providers to prevent minor issues and maintain proper control over the pre-authorization process. The audits must also look at how accurately you recorded the diagnosis codes.
Why Is It Better to Outsource Prior Authorization?
The fact that standardizing best practices for prior authorization could take years, and as it involves multiple, complex steps, advanced technologies such as in-house automation may not be able to optimize workflow efficiencies as effectively. Previously, outsourcing was primarily used as a cost-cutting strategy. However, operational efficiencies and sustained growth have replaced the benefit of lower costs over the year.
Modern outsourcing medical billing and coding partners such as 24/7 Medical Billing Services ensure this through strategic thinking and innovations to complex processes. This further allows the providers to focus on their core services and compete more effectively in a rapidly changing market.