There are a lot of dynamic aspects to the initial assessment and prior authorization process that can impact both providers, and payers, as well as patients. Prior authorization is essentially a type of management practice used by health insurance providers. It requires specific tests procedures, and medication prescriptions to be first evaluated as they related to the cost of care.

This important process is designed to find the least expensive, effective treatment option to keep the cost of care efficient for all parties, including the patient and the other payers. It’s especially helpful for high-cost treatments and medications including surgical procedures and sophisticated diagnostics.

A health insurance provider’s decision to reject or approve a specific course of treatment is typically based on the results of a thorough prior authorization review. This could potentially determine if the treatment plan will be covered for the full or partial amount.

Is There A Difference Between Preauthorization & Prior Authorization?

These are two terms that are often used interchangeably as they refer to the same thing. Though they are different than a referral.

How Is a Referral Different From A Prior Authorization?

A referral is when another qualified and credentialed physician essentially recommends a patient to another physician for special treatment. This is most often a general or patient’s primary physician referring the patient to a specialist or a diagnostician who specializes in a specific area. Though sometimes specialists refer a patient to another specialist. Such as a diagnostician performing an MRI before referring the patient to an orthopedic surgeon.

Prior Authorization refers to a review of a specific treatment plan with the payer, which is often an insurance provider or a public health institution to determine the degree of coverage or to determine if there is a viable, more cost-effective alternative.

How Long Does The Prior Authorization Process Take?

The length of time it takes to submit, review, and receive approval of a prior authorization request can vary widely depending on the complexity of the prescribed treatment plan. At the same time, certain payers and public health institutions might already have their own rules in place for a lot of common medical procedures. With these, the response time is typically faster.

On average the American Medical Association estimates that the Prior Authorization process takes around 3 days. Though this is only the case in around a quarter of the cases seeking preauthorization. Many things can cause delays in the process. To help patients receive the care they need, and to ensure that your time is not lost in prolonged prior authorization delays, it helps to understand the process.

How Does The Prior Authorization Process Work?

The prior authorization process typically starts with a physician determining that the patient needs a specific procedure, diagnostic, prescription medication, or medical device. They are then tasked with determining if their proposed treatment plan is covered under the patient’s medical insurance policy. Many insurance providers and public health programs will require the physician to formally submit a prior authorization request form to attest that the information supporting the medical necessity claim is vetted and completely accurate.

The unfortunate, divide between the clinical and healthcare billing systems means that most of these requests require manually reviewing prior authorization rules for each specific insurance plan that the patient might have access to. This might require paper documentation, or transmitting digital files via an insurance provider’s web portal.

It’s important to note that not all payer rules are not standardized. They can differ widely from one health plan to the next. Even under the same insurance provider, coverage can vary from different levels and programs under their company umbrella. A similar problem is less likely, but still possible in a public health insurance program like Medicaid.

Once the prior authorization claim is submitted the provider will then start the review process. Just how long this takes can vary depending on how common the prescribed treatment plan is. A more exotic course of treatment might require a prolonged review. Whereas something more common might already have an established authorization protocol in place, which will streamline the approval process. With some of the more common treatment plans, prior authorization might not be specifically required, and you, the physician can simply submit the claim to the payer. Though, this does not ensure that the claim will be approved.

In the case of a treatment plan that does require prior authorization by the insurance provider, the timetable is typically longer. Especially if there is any sort of medical coding error or an incorrect CPT code is used.

Upon completing a thorough review of the prescribed treatment plan, and the patient’s coverage for the specifics of that plan, the insurance provider will then either confirm or deny the preauthorization request. In the case of a rejection, the insurance provider might provide further insights on an alternative option used in an earlier, similar preauthorization request.

Why Is The Preauthorization Process So Complicated?

Several steps in the preauthorization process can lead to delays. Especially if there is a critical data entry error or an incorrectly used CPT code. It also requires vigorous participation by both the physician and the insurance provider. Each of which has its own reasoning workflow, and infrastructure differences. Not to mention that different insurance providers have different rules and procedures for reviewing a pre-authorization request.

How To Streamline & Accelerate The Preauthorization Process

Documentation errors are one of the biggest causes of delays in the preauthorization process. This can be something major, like using the wrong CPT code, or a simple typo in the patient’s health card ID number. Making sure that all information is coded properly and correctly before submitting the preauthorization request will go a long way toward streamlining the preauthorization process.

Verifying a patient’s level of coverage with their insurance provider as part of the intake and scheduling phase is also helpful. This can help the physician choose one treatment plan over another based on the existing level of coverage.

Assigning trained and experienced administrative staff to prescreen prior authorization requests can also be beneficial. Not only does it reduce the workload of the physician, but it also provides the scrutiny of an individual who can focus on that one critical task and develops the experience to spot potential errors in advance of submitting the preauthorization request.