Medical authorization, or prior authorization in medical billing, is a management process used by health insurance organizations. It requires procedures, examinations, or medications prescribed by healthcare professionals to be evaluated and confirmed for their necessity or compulsion, as well as the costs associated with them before being authorized.
Proper handling of authorizations enhances patient outcomes by ensuring they receive the right medication, curtailing errors, and reducing excessive or unwanted prescriptions. The precise use of healthcare resources and medication helps in reducing overall costs and enables patients to access affordable healthcare and improved quality of life.
The primary focus of healthcare professionals is patient care. However, in the dynamic environment of evolving billing guidelines and insurance policies, misunderstandings about reimbursements with the insurance company can occur.
What Does Prior Authorization Entail?
Prior authorization involves the insurance company authorizing coverage and payment for prescribed services before these services are executed. Also known as pre-authorization, it requires approval from the insurance company before commencing recommended treatment or services.
During the eligibility authentication process, practices must confirm which services need prior authorization, as approval is generally based on the patient’s insurance policy and plan. Practices will receive a pre-authorization number from the insurance company, which must be quoted in the final claim form submitted after treatment completion.
Prior authorization enables hassle-free claims and reimbursement of bills. It is important to note that such authorization does not guarantee insurance reimbursement, but without it, payment would not be possible at all.
Best Practices for Successful Authorization
- Familiarize yourself with the specific policies and rules of the insurance organization regarding prior authorizations, as each may have unique criteria or requirements.
- Document all treatment decisions and support them with evidence. Insurance companies often believe that healthcare professionals do not always follow evidence-based practices. Thus, decisions for service and treatment must adhere to the most recent guidelines.
- Create a document outlining the list of medications and treatments needed by a patient and determine which require prior authorization from the insurance company.
- Use precise and up-to-date medical codes to describe services and treatments. Incorrect coding can lead to request rejection. Also, verify the patient’s eligibility by ensuring the insurance policy is active and the requested procedures are covered.
- Take advantage of technology, as most insurance companies accept digital submission of forms. Digital submissions can flag incomplete information before submission.
- Understand that different insurance companies have varying requirements or formats for submission. Assign specific insurance companies to members of the team who can become experts in these companies’ expectations.
- Send prior authorization requests well in time for review and processing. Last-minute submissions risk denial due to incomplete or incorrect data. Keep lines of communication with the insurance company open and respond promptly to any additional data requests to avoid delays.
- Prepopulate forms for each insurance company with common information. Specific patient information can be added as required. While time saved per form might not be substantial, it can accumulate over the year and make a difference.
- Maintain a record of all prior authorization requests, along with all necessary information, to help the team track the status as required.
