What Is Medical Billing Prior Authorization & When Do You Need It?
Prior authorization plays a critical role in the process of diagnosing, treating, and accurately billing claims that meet a patient’s important medical needs. Medical insurance providers often require it for specific services and specialty treatments. With prior authorization, the patient, and the physician administering treatment are more likely to see a fast, and efficient payment of a claim. With little to no headaches. Without prior authorization, a claim for specialty diagnostics or treatment is more likely to be delayed or outright rejected.
Prior Authorization Challenges
There are a few challenges that can be posed in the prior authorization process. In some instances, they can lead to delays, denied claims, or rejected claims.
Delays In Receiving Prior Authorization
The prior authorization process can take time. Especially if there is a lot of documentation that needs to be reviewed. This time frame can be extended if the diagnostic or treatment process is rare or unique.
American Medical Association recently published a report stating that 64% of providers had to wait at least 1 business day to have prior authorization approved. There was also an estimated 30% of physicians who reported a prior authorization delay of at least 3 business days.
Anticipating delays in advance of scheduling treatment will go a long way toward streamlining the prior authorization process. It also helps ensure that the patient will receive the diagnostic or treatment that they need in a timely manner. In the case of a denied prior authorization, it can also give you, the physician time to find an alternative treatment, without forcing the patient to endure a significant delay.
Accurate CPT Coding For Prior Authorization
Like most things in the realm of medical billing, accurate coding is essential. This is even more so when it comes to obtaining prior authorization from a medical insurance provider. The wrong procedural code can delay approval or lead to an outright rejection.
There have been some cases where the patient’s coverage wasn’t available before the procedure in question. This is more likely to happen during a medical emergency, a sudden illness overnight or an accident that causes severe mechanical injuries. In a moment like this, the physician needs to contact the insurance provider as soon as possible to verify authorization or to seek alternative treatments that might be within the patient’s scope of coverage.
Implementing Prior Authorization Best Practices
Setting up policies and procedures for obtaining prior authorization is one of the most effective things a small medical practice can do to reduce the risk of a claim being delayed, rejected, or denied. Setting up standard procedures for your administrative staff helps eliminate potential errors and delays.
Include All Necessary Information
Accurate supporting documentation plays a critical role in ensuring that your prior authorization is approved by the insurance provider. This includes adequate evidence and double-checking to make sure that all the correct CPT codes are being applied where needed.
Adhere To Recommended Treatment Guidelines
Most medical insurance providers have guidelines on how diagnostics and specialty treatments need to be performed to ensure complete coverage. Make sure that all physicians and clinical staff are aware of these guidelines and adhere to them. This includes clear communications between the billing team, clinical staff, and the physician.
Obtain Prior Authorization Even For Minor Treatments
Some minor diagnostics and treatments might not seem like they need prior authorization. While they might very well be covered by a patient’s medical insurance the payer might need them included in the documentation process. Especially if one type of diagnostic indicates the need for a more advanced procedure.
This includes things like imaging processes such as magnetic resonance imaging (MRI) and computerized tomography (CT) scans as well as things like the use of higher-cost brand-name pharmaceuticals.
Routinely Update Contracts With Insurance Providers
Most insurance providers will update their contracts on a routine basis. Staying up to date with contracts include things like accurate reimbursement requirements as well as fee schedules and the conditions providers mandate for prompt reimbursement.
Since you are likely going to have multiple different providers throughout the spectrum of your patients, it helps to stay up to date on the top 12 to 15 insurance providers that your network uses. This reduces the risk of delays due to needing contracts updated during the treatment or diagnostic process.
Implement Specific Templates
One convenient way to reduce errors is to use specific EHR clinical templates that are customized to each insurance or payer network. This makes it easier for them to process your prior authorization requests by giving them the critical information in exactly the way they want to see it. You might also want to strongly consider using ASC X12 278 Health Care Services Request functionality where available. This makes it easier than ever to submit prior authorization requests and receive the results promptly.
Perform Routine Audits & Training
Spot checking and performing audits is an important component of any successful medical billing process. This includes performing routine audits throughout your prior authorization processes. This can help catch minor problems and common errors before they snowball into more serious problems. It can also go a long way toward helping to educate and update your clinical in-house administrative staff.
Being able to catch so-called “Bad Habits” in medical billing processes, and prior authorization documentation will go a long way toward ensuring that all your patient’s diagnostic and treatment needs are being met in a timely manner. It also helps reduce potential claim rejections and denials by catching them before they are entered into the system.
Quarterly & Annual Analysis
Applying analytics on a quarterly-basis and collecting a comprehensive report at the end of each year will also help to detect patterns where inefficiencies and errors might be occurring. This could be as simple as needing to alter a data entry practice, using an updated CPT codebook, or communicating with an insurance provider who may have changed their contracting practices.