Commercial payers and Medicare/Medicaid alike often require healthcare providers to ask for approval prior to rendering a service.
A prior approval, or authorization, is a payer’s allowance to perform a procedure on a particular patient given to a healthcare provider. Such approvals are needed to determine a potential medical necessity of services, as well as to confirm a provider’s eligibility to render them. The general process can have different names, such as precertification, pre-authorization, prior approval, and predetermination. Outpatient practices, diagnostic facilities, hospitals, and primary care physicians – all need to obtain authorization from time to time.
Although reliant on the CMS guidelines, insurance carriers have unique authorization requirements. Whether or not prior approval is required always depends on the following aspects:
• Provider’s participation status with the plan
• The number of units of an affected procedure
• Patient’s medical history, including a number of visits to other healthcare providers from the same specialty
• Whether or not a provider is a primary care physician for a given patient
• Place of service
• Nationwide regulations (such as those imposed during the COVID-19 pandemic)
• Unique requirements of a given insurance carrier
It is critical to check whether a service requires to be preauthorized prior to furnishing it. For most payers, you can do that online. If this is not the case, however, you would need to contact customer service.
According to the 2019 physician survey conducted by the American Medical Association, 91% of patients experience some delay in receiving care due to cumbersome prior authorization procedures. At the same time, 24% of physicians reported that such delays have resulted in adverse events in patients, especially in cases of a severe disease. Our experience shows that, unfortunately, insurance payers tend to ignore such findings and implement stricter authorization requirements instead.
The prior authorization process begins when a service prescribed by the provider requires to be preauthorized by the plan. To request/manage the prior authorization, communication between the physician's office and the insurance company is required. To get permission, the prescriber may need to fill out a form or contact the insurance company to explain their suggestion and the need for the service based on clinically relevant patient characteristics. Clinical pharmacists, physicians, and nurses at the health insurance company then review and approve/deny the request. If an insurance company denies the prior authorization, the patient or prescriber may be able to request a reconsideration of the decision and file an appeal.
Requests for prior approvals can be submitted via several ways:
• By faxing a specific form to the payer
• Through the payer’s customer service
• Online, using the payer’s provider portal
In some extraordinary cases, healthcare providers are allowed to obtain a so-called “retro-authorization”, i.e., an approval requested after the service has been rendered. Whether or not to approve such a request depends on a patient’s clinical condition (when critical, a physician may not be able to wait for a prior approval), or on other tangible circumstances that prevented the provider from making a request on time. Most payers have a one calendar day “grace period” for authorizations.
Bear in mind that in some cases insurance carriers do not handle authorizations on their own. Instead, they cooperate with third parties. Nevertheless, the core of the process is always the same.
Once your request is approved, in most cases you will receive a written confirmation with a unique authorization reference number.
Issues related to prior authorization constitute a large portion of preventable claim denials. However, in this matter, physicians and insurance companies bear equal responsibility. Below are the most common clauses that we deal with on a daily basis:
• Provider did not know an authorization was required
• An authorization has been obtained, but the payer failed to process it accordingly and denied the claim
• Provider obtained authorization for an incorrect procedure and/or invalid treatment period
• Payer requires an authorization despite the fact that it is not needed according to its guidelines
Each of these cases is reversible or at least can be prevent. Once you have a tangible authorization on file, it is fairly easy to appeal an incorrectly denied claim.
At WCH Service Bureau, we have submitted over twenty thousand appeals for our clients within the last four years. Most of them have reprocessed the original decision for denied claims. Our experts have done their best to balance between expertise and blunt stubbornness to achieve this.
Are you sure that you are getting paid what you deserve? Contact us to try our all-encompassing medical billing service to see what can be appealed.