It’s no wonder then that for medical practices, managing authorizations may seem like one of the most time-consuming portions of your revenue cycle: staff might find themselves spending days attempting to decipher payer requirements, digging for documentation, initiating request submissions, chasing statuses, and responding to information requests. For a patient, it may translate into an extended or postponed treatment – and for your practice, failure to meet those requirements might result in billing and reimbursement challenges.
There’s a better way – electronic prior authorization allows the process to be streamlined. Instead of faxing, making phone calls, jumping through portal hoops, and manually checking in repeatedly, practices can leverage technology to facilitate and monitor the entire process electronically. Understanding how the ePA process works is crucial for ensuring administrative efficiencies as well as for minimizing avoidable billing and reimbursement pitfalls. Here, we examine what electronic prior authorization is, how it functions, its advantages and disadvantages, pitfalls to avoid, and how outsourced revenue cycle management (RCM) could prove helpful in the authorization process.
What Is Electronic Prior Authorization?
Electronic prior authorization is the practice of using digital technologies for the submission, exchange, transmission, and ongoing maintenance of prior authorization information between a healthcare provider and an insurance payer. Traditional PA requires payers and providers to engage in repeated calls, manual document transmission, form submissions, and manual status checks-and ePA utilizes technology in such a way as to reduce the extent of those activities to digital exchanges through interconnected systems or payer portals.
The process may differ significantly based on factors such as the specific payer, the health plan, the specialty, the type of medication or procedure prescribed, and the technology platform used. However, an electronic PA typically follows these steps: identifying whether authorization is needed, collecting relevant patient and insurance data, selecting the applicable medication or procedure, submitting necessary clinical documentation and treatment data, checking the authorization status, and, if applicable, responding to requests for additional information and accurately documenting the payer’s decision. The intention of ePA is not to merely convert a paper process into a digital document, but to establish a cohesive organization process from initial patient outreach to claim submittal.
How Does Electronic Prior Authorization Work?
The step-by-step workflow process varies depending on individual payers, however, most programs generally include following a standard process:
1. Eligibility Verification and Benefits Confirmation
In advance of any authorization request, providers are typically required to verify whether the patient is an active member and obtain an accurate list of which plans and which benefits apply to the services rendered. This information is critical and may directly impact whether additional approval is needed from the payer.
2. Determining If the Requirement is Applicable
Not all medical procedures, prescription medications, and services necessitate pre-authorization; in fact, some may be considered out-of-network without it. Insurance payers maintain unique policies regarding coverage, which means practices should verify present PA requirements-even against a familiar past-list-instead of working under general assumptions.
3. Clinical and Billing Information Collection
An electronic request often entails the following types of information:
• Demographics of the patient
• Data on insurance coverage
• Insurance provider’s information
• Code(s) that are CPT, HCPCS or ICD-10-CM-appropriate
• Patient medical chart notes
• Medical treatment history
• Applicable test results
• Supplementary documentation
Because incorrect or incomplete coding and documentation is commonly associated with delays, accurate record management is of paramount importance in this phase.
4. Initiating the Electronic Request
The required prior authorization document is forwarded through an electronic health system, payer portal, other integrated electronic systems or applicable digital submission platform. Based on the medication, procedure or type of treatment being applied for, automated payer systems may handle the submission directly or may require clinical review processes by a payer clinician.
5. Authorization Monitoring and Follow-up
A successful authorization process doesn’t stop with submission. Practices must also be available to respond promptly to additional requests for clinical documentation or other necessary details from payers that may appear. Depending on the situation, there might be any number of positive or negative resolutions to the authorization process.
6. Documenting and Communicating the Outcome
After a decision has been reached, whether it be approved or denied, the outcome of the authorization is meticulously documented in the designated system. The pertinent information, such as the unique authorization number, scope of approved services, effective dates, or other important payer guidelines and procedures, are then disseminated by support staff to all departments.
What Are the Benefits of Electronic Prior Authorization?
A well-defined ePA workflow can contribute significantly to the efficiency and productivity of any medical practice. The advantages include:
Better Patient Care Experience
By speeding up the authorization process and allowing staff members more time for patient assistance, ePA indirectly promotes an improved experience for all patients.
Faster Payment Cycle Times
With prior authorizations handled much more quickly by an ePA process, your practice avoids delayed approvals and the subsequent issues to payment collections that often occur with them.
Improved Revenue Cycle Management (RCM)
ePA reduces the back and forth often associated with pre-authorizations, saving time, money, and manpower and resulting in healthier overall revenue cycles.
Reduced Costs and Fewer Errors
When staff isn’t spending time on the manually Intensive task of obtaining prior authorizations, resources and administrative burdens can be redeployed more efficiently, while also significantly decreasing the chances of human errors that can prove costly down the line.
Enhanced Efficiency of operations, Reduced Administrative Staff Time, Enhanced documentation, and a better overall view of the workflow from start to finish.
The difference between traditional electronic and pre-approval:
Traditional pre-authorization is typically administered manually with heavy use of phone calls and faxing, whereas an electronic PA will use a completely digital process. Instead of phone calls, automated systems will be used. While the process of submitting the paperwork may still exist, additional follow-up is generally eliminated. Electronic PAs will streamline your billing cycle, offer visibility into pending authorisations, and ultimately save significant administrative costs associated with a paper system.
Although ePA can improve efficiency for your medical organization and decrease lost revenue associated with errors. Additional time from practice employees and clinician assistance is sometimes required to navigate certain PAs.
What Challenges Can Still Occur With ePA Healthcare Workflows?
Electronic prior authorization is not the answer for every authorization issue.
Payer Differences
Each insurance company and health plan has its own authorization process and workflow. You have to adapt that workflow to the payer.
Incomplete Clinical Documentation
Technology cannot make up for missing medical records or lack of documentation. When documentation provided cannot support the request, further review or denial may be made.
Coding Errors
Incorrect CPT, HCPCS, or ICD-10-CM codes may result in delays in authorization and also problems later in claims processing.
System and Integration Issues
Electronic PA might also rely on interfaces between the practice management, EHR, clearinghouse, payer platform or other technologies. If these are not seamlessly integrated, there can be duplicated effort and an increased likelihood of data entry errors.
Authorization Does Not Guarantee Payment
A final note for providers: a provider making a claim does not ensure payment! Inclusion of authorizations by the payer or insurance company does not mean the claim will be paid.
The claim is still subject to the individual payer rules-eligibility, coding, medical necessity, timely filing, documentation, and other plan guidelines, etc.
Common Electronic PA Mistakes Medical Practices Should Avoid
Institutional practices will need to build external controls in to an electronic process.
Assuming Every Authorization Is Automatic
Submission electronically does not automatically mean each request will get an instant answer. Staff should keep an eye on requests and respond to inquiries from payers.
Using Outdated Payer Information
Authorization requirements are subject to change. Practices need to check the current requirements from payer, rather than simply relying on a current list of references.
Entering Incorrect Codes
Incorrect combination of requested service, diagnosis and submitted codes can lead to unneeded confusion.
Failing to Track Authorization Dates
An authorization can have dates of effectivity, limitations on services, etc. Staff should note and monitor such.
Not Connecting Authorization With Billing
Authorization information should flow into the larger revenue cycle. Authorized billing representatives should be permitted to review authorization information prior to claims submission whenever practical.
How Can Medical Practices Improve Their Electronic PA Process?
Technology operates most efficiently when part of a predictable workflow.
Consider these practical steps:
Check eligibility early. When possible, verify coverage and benefits before the actual scheduled service.
Verify if authorization is needed. Verify payer-specific requirements for the service to be provided.
Do it right. Make sure the CPT, HCPCS, and ICD-10-CM information is correct.
Prepare documentation. Collect clinical records for submission.
Submit requests in a timely manner. Don’t wait to submit after scheduling.
Monitor ‘Pending’ requests. Decide who will be responsible for tracking un-authorized authorizations.
Payer responses must be documented. Keep track of authorization numbers, decisions, dates, and conditions.
Collaborate with billing. Provide authorization info to the claims team.
Review the denial decisions. Identify common reasons for denials due to authorization.
Update workflows. Use data on denials and authorizations to find loopholes in your processes.
For many practices, juggling these steps consistently can be challenging when employees are already spread thin with scheduling patients, patient calls, eligibility confirmations, coding, claims and other administrative tasks.
Noventra RCM may be able to assist healthcare providers with appropriate medical billing and revenue cycle management activities, such as prior authorization assistance and insurance verification. An organized RCM workflow can help the practice maintainauthorization-related activities within the overall billing process.
When Should a Practice Consider Professional RCM Support?
The practice may also find it helpful to have extra assistance if the amount of staff time spent on authorization work is burdensome, or if authorization problems are continually impacting claim and payment processing.
Professional support may be particularly useful when a practice experiences:
Increasing amount of authorisation requests.
Frequent payer follow-up
Difficulty tracking pending requests
Authorization-related claim denials
Delays caused by incomplete documentation
Limited administrative staff
Disconnected billing and authorization workflows
More accounts receivable as a result of unsatisfied claims
An RCM partner can organize the processes related to eligibility, authorization, claims processing, deny management and other revenue cycle activities.
If your staff is spending a lot of time managing payer requirements rather than your patients and your practice basics, Noventra RCM can assist you with professional medical billing and RCM services services to healthcare practices.
Does Electronic PA Eliminate Prior Authorization Problems?
No. Electronic prior authorization can streamline the process of submitting and processing requests, but will not simplify payer policies.
Providers still need to:
Understand payer requirements
Submit accurate information
Provide appropriate clinical documentation
Monitor requests
Respond to payer questions
Track authorization decisions
Ensure the billing information matches the authorized services.
Review authorization-related denials
This pattern yields the best results when technology is appropriate and coupled with trained and equipped personnel, dependable processes, timely and correct information, and continuous review of workflow.
How Electronic PA Fits Into the Revenue Cycle
Prior authorization is strongly related to the larger healthcare revenue cycle.
It could be start out with the eligibility check then, proceeds to the authorization, scheduling, service provision, coding, claim submission, payment posting and the accounts receivable follow up.
An authorization weakness can have downstream implications. For instance, an authorization weakness can potentially be a factor in a claim denial, which may lead to additional research, correction, resubmission, or payer follow-up.
Therefore, practices should treat authorization as an integral part of an RCM process and not as an administrative task.
Noventra RCM will enable practices to optimize a wider range of revenue cycle needs with the appropriate levels of authorization assistance, such as medical billing, claims processing, denial management and AR follow-up.
Frequently Asked Questions About Electronic Prior Authorization
Is electronic prior authorization the same as prior authorization?
No. Prior authorization is the process of approval from the payer; electronic prior authorization is the process of utilizing electronic technology.
Does every insurance payer use the same ePA process?
Number. Requirements from payers, technology at hand, services covered, and workflows are also different. Practice will comply with current payer requirements applicable.
Can electronic PA prevent claim denials?
While may not resolve all administrative issues and can only be effective if done correctly and appropriately documented, submittted to one or more carriers may reduce some of these problems by facilitating claim processing and documentation. May not ensure payment of claims nor prevent denials.
Does electronic PA replace medical billing staff?
Not always. Electronic systems may eliminate some tasks, but staff still required for validation, documentation, exceptions handling, payer interaction and revenue cycle management.
Conclusion
Electronic prior authorization helps streamline a complex process. Transitioning authorization requests and tracking into electronic workflows, providers may be able to reduce duplication of effort, increase transparency, and more tightly couple authorization with billing and claims.
But technology can do it all by itself, so it’s not enough. Proper verification of eligibility, coding, documentation, familiarity with each payer, prompt response time, and monitoring are still required.
For medical providers, the bottom line from the results is straightforward: treat prior authorization as an extension of the revenue cycle. When authorizations are integrated with billing, claims, denials, and AR management, providers and payers can quickly identify issues and more reliably meet payer requirements.
Does your practice struggle with managing prior authorization in addition to handling the other aspects of the revenue cycle? Noventra RCM provides professional medical billing and RCM solutions to manage all areas of the revenue cycle and can aid you in your practice.