There’s a reason that prior authorization is one of the most frequently cited frustrations when it comes to medical billing and revenue cycle management. That first-level authorization denial can postpone treatment, saddle staff with additional administrative tasks, and complicate what is already a complex landscape. For providers, an authorization issue can be an obstacle before even a single claim is submitted, and its financial ramifications can resonate throughout the revenue cycle.
Whenauthorization requirements are not met, information is missing, or rules of a particular payer aren’t properly followed, a medical practice can be faced with claim delays and outright denials.
Beyond their financial sting, those issues also divert staff resources away from providing direct patient care and service. Therefore, robust prior authorization management is a critical component of denial prevention. In this guide, we cover what prior authorization denials are, the most common triggers, and how medical practices can tackle-and ideally, avoid-problems with getting necessary authorizations.
What Are Prior Authorization Denials?
Prior authorization denials occur when an insurance payer does not approve a service, medication, procedure or treatment before it has been furnished, or when a later medical insurance claim is denied because the payer never received a required prior authorization (because it was missing, invalid or not accepted by the payer).
What constitutes prior authorization depends on the payer, service, procedure and the payer’s rules of engagement. While Medicare, Medicaid and a multitude of commercial payers all have their own requirements, process and standards for documentation and submitting an authorization request, each might have specific rules related to how and when that request should be submitted. For example, if a practice schedules and provides a medical procedure that requires a prior authorization for medical clearance that, by the time of the service is completed, should have been received, it may lead to a claims denial after the fact.
Why Do Prior Authorization Denials Matter?
Authorization issues aren’t just a problem for one isolated claim; they can also ripple out across the entire revenue cycle. Issues like delays in payment, time added for additional claim review, outstanding accounts receivable, increased time devoted to follow-up and appeals and potentially delays in patient treatment are common fallout.
More extensive authorization denials can add further layers of complexity to the revenue cycle process and strain a medical billing and coding staff.A solid authorization process identifies potential problems prior to the time a claim is ever submitted, which is precisely why prior authorizations is a critical component of an effective revenue cycle management strategy.
So what causes prior authorization denials and what steps can be taken to prevent them?
What Causes Prior Authorization Denials?
The first step towards preventing prior authorization denial problems: knowing the cause.1. Authorization was not obtainedThis is the most common and perhaps the simplest explanation – the practice failed to get authorization when the insurance plan requires it.
Authorization needs should be vetted well in advance of delivering the service; if there’s not proactive checking about what specific services, procedures, equipment or medical devices are subject to a prior authorization from an insurance carrier and the practice doesn’t know and act on the verification results prior to performing the services, a claim will in turn get paid later.2.
Invalid or incomplete patient insurance information
A provider requesting a prior authorization requires accurate information related to a patient’s identification including date of birth and insurance plan, and their applicable policy or member identifier. If there is so much as one character missing in an identifier it may render invalid the resulting request or it may result in the request being directed to the incorrect patient coverage, creating the authorization issue that will result in later delay or den of your claim.3.
CPT/HCPCS/ICD-10-CM codes are incorrector are not compatible
In creating your request for authorization, your codes are required to correctly demonstrate and reflect what is happening both in terms of the service or procedures that you plan on performing along with validating the underlying clinical diagnosis of a patient as necessary and supported by relevant details or medical notes as documented by physicians or physician assistants, as otherwise prescribed in a payer-specific medical policy.4.
Insufficient supporting clinical documentation
In terms of submitting requests to obtain prior authorizations for medical procedures, services, or medications with the specific intent to meet each plan’s medical necessities criteria the provider must meet the specific clinical document requirements for all requested services or care. An insurer may question or reject the patient’s medical need because they simply do not feel the level or intensity of the documentation submitted does enough to meet the criterion needed for the services or procedures to go into service without prior authorization.5.
Medical necessity does not meet approval criterion
This is similar to \#4 above in that if the information presented does not articulate the medical necessity required the service simply will not be authorized and so can only imagine where this becomes obvious as in an already-submitted claim.
Payers want medical staff to have the best patient outcome for each patient which means following established standards of practice, what’s medically required and for the plan to take responsibility only for such items, services and drugs proven to do so and to be in a form of what’s medically necessitated according to the payer guidelines for given procedures or services that fit the description of a medical policy.6.
Authorization obtained for wrong medicalservice
Although authorizations may be issued for a specific type of service or procedure (or even a specific procedure or physician), sometimes a different service is billed and will be caught later during post-payment audits or claims review. For instance, if a procedure was authorized but the practice performed a closely-related one, the original authorization may not cover the procedure billed on the medical claim.7.
Authorization is expired
Prior authorizations often have time-sensitive validity limits. If the authorization was obtained long in advance of service delivery and plans for the patient was subsequently modified or changed, then the previously used Authorization may now be invalidated and that can create a new denial.
If the dates provided within the Authorization are inaccurate, then that too could contribute to authorization denial problems.8.
Auth request was received late in the pre-service billing or administrative cycle
Some payers simply maintain a list of services/procedures for which they require authorization a fixed set of timeframes (sometimes up to three to five days) in which requests for Authorization for those services must be received to be honored when it came down to time the payer was billed, prior to providing these services that can also be cause for delay in payment by a patient.
HowCanMedicalPracticesPreventPriorAuthorizationDenialsproblems?
Youcanandlikelyshouldreaptherewardbyavoidingthem.
AvoidauthorizationDenialsbyensuringyourAuthorizationsoff-withtheaforementioned8 (ormore) itemsasachunkofyouroverallprocess. AvoidauthorizationDenialsbyensuringyourprocess:1. BeaheadofanAuthCheck and verification of an initial visitA proactive approach is by always doing authorization check for initial visits, then you verify the authorization and determine if auth is needed based on a providers plans-related utilization history and the procedure as indicated by physician office guidelines in accordance with their medical policy that may or may not contain guidance that indicates authorization is required, which is why all these checks need to run in parallel with your scheduling – if not on day of.
When is an auth needed?
That the medical staff is knowledgeable of all guidelines.A proactive authorization process avoids authorization failures by checking all requirements early, well before the time the actual service is scheduled or rendered. Staff confirm with patient registrationWhether an auth is required by checking patient eligibility requirements from their healthcare plans. If an auth is requires, then follow all guidance and best practices associated with managing this to successfully Obtain Authorization with required information.2.
Keepyourpatient insuranceinformation updated
Patients’ insurance plans change from one year to the next, sometimes even in the course of a single year.
To avoid missing a critical auth check along with information being out of date, your front desk needs to verify and document their up-to-date insurance coverage.
This practice not only helps prevent a later denial for an invalid plan, but also serves as one check in confirming that what you’re checking is correct. The information you’ll want to gather from a new or returning patient include’s patient’s name, date of birth, insurance policy/plan and member ID, and address of the insured.3.
Use anauthorizationwork-checklist
A standard checklist ensures all essential information needed for an authorization has been discussed, validated, submitted to, and confirmed by, a health insurance carrier.
The Checklist should Include Verification Of:a. Patient’s health insurance coverageb. Medical necessity justificationc.
Is authorization is required for servicesd.
Relevant procedure/service coding and relevant diagnosis code. E. Patient medical, clinical notes / records and testing or any additional support information, in an approved manner, that might require to justify prior auth required.
Submit the authorization through the payer’s specified process. Note the authorization number, dates, and other relevant information. Verify that the authorization corresponds to the requested service.
Follow up to check on authorization status and communicate any changes before service is rendered.
Implementing a consistent process can alleviate reliance on memory and improve tracking of responsibilities. 4. Track authorization number and dates The prior authorization does not end once obtained. Authorization numbers, effective dates, units of service, and other pertinent details should be tracked and accessible to billing and/or coding staff so that problems with authorization expiration or mismatched authoriation can be avoided. 5. Coordinate Authorization with Coding & Billing The authorization process should not operate independently of the medical billing process.
The data needed for the authorization process should be the same as what will be used for coding the claim and submitting to the payer for reimbursement.
Communication between authorization, coding, and billing can help identify discrepancies before the claim is even sent for reimbursement. 6. Monitor payer-specific requirements of each payer will have a unique process for prior auth authorization requirements change over time as providers and payers adapt to a dynamic healthcare system. Processes should be in place for your facility to track current payer requirements and update accordingly.
One size does not fit all!
7. What Should You Do After a Prior Auth Denial?
The denial can be frustrating, and the knee-jerk reaction may be to resent the denial as is hoping for different result but this is typically of very little use.
The practice should investigate the underlying causes of the denial to see which to the right approach.
Here are a few things to consider reviewing when a prior auth is denied by the payer: Denial reason Payer guidelines and requirements The authorization in our system Patient eligibility Submitted codes Supporting documentation Original prior auth request and its effective dates and corresponding claim Some actions include resubmitting the denial with additional requested information, filing an appeal, or following up directly with the payer to clarify requirements.
8. How Does Prior Authorization Management Support Denial Prevention?
An effective prior authorization process aligns authorization activities with your medical billing and revenue cycle operations. Rather than considering it a separate activity, prior authorization management requires keeping your authorization process within your normal revenue cycle and tracking authorization status.
Tracking all authorization related denials can indicate issues within your authorization/RCM processes.
For instance, if prior authorization denials keep mounting up on the same service/procedure then it is likely time to review the current authorization/RCM processes to pinpoint what and where the error is. When Should I consider Using Professional Support with my Authorization process? When authorization,eligibility, insurance verify procedures are integrated together it is more efficient to work them efficiently.
Unfortunately, the authorization process often creates an administrative bottleneck when staff are juggling eligibility, claim, patient communication, scheduling and billing. If prior authorization denial are continuing to plague your medical office, an option for your practice could be professional medical billing service for comprehensive revenue cycle management (RCM). Noventra RCM provide a complete menu of medical billing services: Insurance verification, Eligibility verification, prior authorization, medical coding, billing, denial management, and other revenue cycle solutions, allowing practices the to leverage expertise that support them in managing every authorization and denial challenge effectively.
Noventra RCM, how can we support your practice.
If you are having difficulty keeping up with pre-authorization guidelines and denials, an efficient and proactive solution is vital for your practice. An excellent medical billing service, likeNoventra RCM , can offer robustRCMservices and specific solutions for pre-authorizations that support your practice’s overall revenue cycle management, eligibility, prior authorization, medical coding and other revenue cycle processes. Let Noventra RCM can help you keep an organized revenue cycle while your teams at your practice focus on taking care of patient, which ultimately keep those healthy revenue dollars coming in. If you are battling authorization and/or billing issues, an organization of existing practices that would assist them to identify, repair and build a stronger authorization process will assist them at all opportunities possible.
Conclusion
Prior authorization can present challenges to medical facilities and lead to significant administrative delays and revenue shortages when denied or mismatched.
Whether caused by the sheer complexity of authorization processes, administrative backlogs, inaccurate patient data or failure to adhere to payer guidelines, authorization denials can result in delayed reimbursement and financial disruptions to your organization. Proactive authorization is not only best practice but a proactive revenue cycle step toward efficiency and profitability. By keeping accurate insurance information updated with payer organizations, verifying insurance early in the verification process, understanding the complexities of a particular payer’s prior authorization policy, and utilizing effective workflow process to manage prior authorization requests and responses through claim submission, will improve collection cycles for each authorization process.
Having appropriate support and an efficient workflow through an RCM partner for authorization needs can assist practice and medical facilities of all size by providing reliable authorization management. Professional RCM services from organizations like Noventra RCM can offer dedicated support.