WHY IS AUTHORIZATION REQUIRED?

Preauthorization, precertification, prior authorization, notification are terms used interchangeably in the medical billing world. Some situations and procedures require authorization requests in advance from the insurer to be reimbursed fully for the services.

Verification and authorization play a vital role in managing the revenue cycle, as mostly the denials happen during this process. Preauthorization is where the providers determine the coverage based on medical necessity, benefit limits and obtain approval from the insurer for the rendered service.

For instance, if a physician is prescribing a particular drug or service and has to obtain authorization from the insurer to keep healthcare costs in check, in that case, they send an authorization request, and the insurer checks the medical necessity of the service or drug before agreeing to pay. As a result, the rationed healthcare process usually takes five to thirty days, depending upon the insurer.

Importance of Authorization

The process does not guarantee reimbursement, although if necessary and not provided can result in claim denial or non-reimbursement. Providers obtain an authorization number which is included in the claim to avoid any denials.

This process will make sure that the service is not duplicated and help the patient to recover. If your claim still gets denied stating lack of medical appropriateness, then appeal to absorb costs for procedures that were preauthorized.

Procedures that require authorization

Many insurers require authorization for a set of expensive & risky procedures before seeing a physician. Most PPO benefit plans use a pre-certify requirement from the provider for inpatient hospital admissions like inpatient rehab, acute care, etc. & coordinated healthcare like home infusion therapy, skilled nursing visits, etc.

Other procedures require authorization to review the medical necessity and help lower the cost of expensive prescriptions.

• CT scans
• MRIs
• PET scans
• Prescribed medications
• Durable Medical Equipment (DME)

No authorization obtained in any emergency department or post-stabilization care services for outpatient emergency care. The treating physician makes it medically necessary until the patient’s condition gets stabilized.

Submission Process for an authorization request

The provider can submit an authorization request both electronically and manually. Authorization forms are available offline and online for a written authorization request. Every insurer has its specifications, though the following remains unchanged.

• Patient’s demographic details update during the verification process, like insurance ID number, name, date of birth, etc.
• Referring and service provider details like Tax ID number, NPI (National Provider Identifier) number, phone, fax number, and service address
• Medical procedure/requested service along with correct CPT/HCPCS codes • Diagnosis description and corresponding ICD codes
• Specific details about service location like Tax ID number, NPI number, Address, phone, and fax number
• Length of hospitalization for inpatient care

Additionally, the provider has to submit medical notes supporting the rendered service. If an insurance company asks, you must submit the supporting documents like previous treatments and elucidations on the provided service.

Authorization at the right time helps to improve RCM while you can focus on quality patient care. Early submission of the authorization request before the treatment helps obtain the authorization number on time to prevent any rejections.