Why Pre-Authorization Services Are Vital for Smooth Operations

The healthcare system requires pre-authorization (PA) when payers need to grant their approval for providers to treat patients. Insurance companies provide this confirmation to verify that healthcare procedures, along with care plans, drugs, and treatments, are clinically necessary for reimbursement.

We at Capline Healthcare Management truly understand the necessity of pre-authorization services. In this blog, we will explain the significance of pre-authorization procedures through multiple real-world examples.

The Need for Preauthorization for Smooth Operations

The Pre-authorisation services stand essential for revenue cycle management (RCM), as payers need to confirm which services or treatments qualify for reimbursement.

Health providers must wait for authorization from insurers before delivering specific treatments or items, or they should contact the health insurer to obtain approval before performing the service.

The pre-authorization services decrease both service duplication and payer expenses. Treatment processes are delayed when an unapproved authorization is denied due to missing patient information or incomplete medical documentation.

For example:

• A pulmonologist might order a chest CT scan for their patient, yet the same procedure was previously prescribed by a cardiologist several weeks ago. The insurance company requires proof that the previous scan was reviewed and that additional imaging is necessary before authorizing the current CT request.
• The insurance provider needs to verify treatment effectiveness before approving three more months of identical physiotherapy for a patient who received one month of therapy. The insurance provider will approve the extension based on a positive patient response but will deny it if the patient does not show improvement.
• The need for pre-authorization services does not apply to specific operations, but healthcare providers can request retroactive authorization in emergency cases or when treatment is provided.

The Process For Getting Pre-Auth Management

The healthcare institution checks the patient’s medical insurance and verifies his benefits upon arrival. The individual receives an approach from staff to provide additional details when any information is absent. The patient receives information about possible expenses at this stage of the process. The medical PA software requires data revisions when any changes occur. The PA team from the insurance company examines patient appointment times before contacting the payer’s backend team to obtain preauthorization codes.

The codes are transmitted to the doctor’s office by the team, which verifies that the health insurance company pays for the treatment while ensuring the patient receives all the benefits to which he is entitled.

Keep in mind that after receiving a referral, be sure to take the following steps.

• The provider must contact insurance to share clinical documents to obtain authorization to start treatment.
  Providers must finish the start of the care document and care plan paperwork before sending clinical data along with the pre-auth management request form to insurance providers for upcoming visit authorization.
• The provider ought to have a strict timeline of follow-ups and an events calendar to keep tabs on the progress; an example is where some clinics get follow-up calls from the patients through the telephone and mail snail after asking for authorization for 5 business days after a week, not just will the reminder call be placed to the insurance provider, but even the patient will be notified that the service may not qualify unless the insurance provider responds – this would even trigger patients calling the insurance company for their follow-ups; after 10 days, notifications will be made to the insurance provider, the physician, and the patient, communicating the disruption in the service; after 13 days, the service will be cut off. If the routine is different, the healthcare facilities may have their ways of following up on a pre-auth management request.
• All PA requests should be tracked weekly to show their current status between open and pending, and rejected; this tracking system helps identify ways to streamline the PA process at healthcare facilities.

Some benefits of pre-auth management include:

• Reducing rejections and increasing collections.
• Lowering write-offs.
• Helping patients understand their financial responsibilities.
• Allowing healthcare providers to focus on patient care.
• Offering accountable and cost-effective solutions.

Guarantee Smooth Preauthorization

Sometimes, healthcare providers might encounter some hurdles regarding pre-authorization procedures. Therefore, the following are some of the practices that might help minimize disruptions and render the process seamless.

• The process of obtaining preauthorization requires both accurate documentation submission and regular follow-up procedures.
• Healthcare facilities must inform insurance companies about all emergency patient hospitalizations.
• The payer and provider must maintain open communication channels. The insurance provider needs to maintain regular communication with their clients.
• The integration of pre-registration data with the PA technique will enhance the PA process efficiency because patient information is collected before appointment scheduling.
• It is very important to use CPT codes appropriately. The person who bills must choose the appropriate Current Procedural Terminology (CPT) code.

What Happens If Pre-Authorization Is Not Obtained?

Policies regarding who is responsible for paying the bill when preauthorization is not given are already simplified above but note that some other health plans also expect the physician to take accountability. Some insurance payers do not wish to pay after surgeries have been performed, which has been defined above as non-paying.

The insurance companies utilize exclusion lists to specify which drugs and treatments in the course of a Plan will be covered and which ones will not be.

These are the patients who may very well end up with a lack of an operation, which can sometimes, unfortunately, lead to odds of modifying treatment plans against medical advice. Many people make the mistake of assuming that having medical insurance means that they will be reimbursed for their prescribed medicines or therapies and do not consider the new exclusion list entries until the payer informs them that the operation is not covered.

Bear in mind that every single payer has their own set of exclusions to bases justified on the payments made or not accepted on the claims.

As inclusions, some payers may accept selective/emergent/urgent surgeries, inpatient surgical or other skilled nursing care, inpatient rehabilitative treatment, subacute care, and even organ transplant procedures. Such procedures are also cited as becoming part of the standard practice requiring pre-authorization services. Ultrasounds, CAT scans, and MRIs are expensive radiological services and, like most expensive services, require preauthorization.

The screening tests (ST), along with Outpatient Treatment (OT), Physical Therapy (PT), and initial revie,w do not need prior approval. The ST procedure requires no prior authorization during the initial 12 visits or hours of the calendar year. Healthcare practitioners receive instructions to avoid prescribing and billing medications that are not covered by insurance.

What is Retroactive Authorization?

Healthcare providers need to request retroactive authorization when emergency procedures become necessary for patient care. Most insurance companies need treatment authorization within 14 days after the patient receives medical care. The physician submits claims through retroactive authorizations, which lead payers to process the claims according to established rules.

Final Thoughts

Healthcare practitioners need to obtain preauthorization even though it might result in delayed treatment and service denials for patients. Patients who experience excessive paperwork and prolonged wait times should still pursue PA to manage healthcare expenses and obtain top-quality medical care.

Capline Healthcare Management offers advanced Pre-authorization services, including revenue cycle management to help medical practices boost cash flow and simplify billing.