The burden of Prior Authorization

According to a recent survey from the American Medical Association (AMA), Prior Authorization creates an administrative burden for healthcare practices, negatively impacting providers and delaying patient care. The survey also found that providers complete an average of 41 prior authorizations each week and spend an average of two business days on the processes. Forty percent of physicians have staff who exclusively complete prior authorizations. 88 percent of survey respondents reported that prior authorization generates a high or extremely high burden. Even though providers work hard to reduce prior authorization claim denials, insurance carriers continue to expand the number of visit types and procedures that require prior authorization, leading to an upswing in denials. In this article, we will discuss the top reasons and best practices for avoiding prior authorization denials.

Reasons for Prior Authorization Denials

• Providers might be getting enrolled with new insurance carriers and every insurance carrier has its own set of rules for prior authorization. It’s obvious to receive prior authorization denials with newly added insurance carriers.
• As discussed earlier, insurance carriers change billing guidelines unexpectedly. Insurance carriers might update their website or provider portal with revised guidelines. But is difficult for the practice owner to keep track of all billing updates. The provider will come to know about these billing updates, once their claim/s got denied. Once their claim gets denied, it will consider a ‘soft’ denial remedied by resubmitting forms in accordance with the insurance carrier’s updated specifications.
• Another obvious reason for prior authorization denial is not having skilled manpower to handle prior authorization requests. You need skilled manpower to find out prior authorization requirements, timely submission of application & supporting documents, and constant follow-up. As mentioned earlier, prior authorization is a very time-consuming and tedious process.

Best Practices for Avoiding Prior Authorization Denials

• Eligibility and benefits verification: Ensure that your every visit is checked for patient eligibility and insurance coverage. Make it part of your revenue cycle process to check whether prior authorization is required for any patient visit.
• Correct procedure codes: It’s critical for the billing team and physicians to work hand in hand to mitigate denials from having an incorrect procedural code on the prior authorization. For example, if the provider schedules a biopsy that doesn’t need prior approval but then excises a lesion (which needs prior approval), the claim for the excision will likely be denied. There’s no penalty for authorizing a procedure and not completing it, so it’s better to get prior authorization.
• Denial management: Even though you are working diligently, expect a few claims are going to get denied. As mentioned earlier, insurance carriers keep on adding the number of visit types and procedures that require prior authorization, leading to an upswing in denials. Whenever you receive a denial, talk to the insurance rep and appeal it with the required documentation asap.
• Evidence-based clinical guidelines: Thorough documentation based on a respected clinical source is the best way to obtain preauthorization or appeal a denial. In addition to government sources, it may be worth asking your most frequent payers what guidelines they use. Where ever applicable, clearly document any deviation from evidence-based guidelines. For example, if a provider plans to perform a sigmoidoscopy on a 45-year-old patient, it’s critical to include the fact that the patient’s family history includes colon cancer in a first-degree relative at age 40 on the precertification request.
• Many payers require authorization for services prior to or within fourteen calendar days of services rendered. Requests for approval filed after the fact are referred to as retroactive authorization and occur typically under extenuating circumstances and where provider reconsideration requests are required by the payer. Similarly, personal injury and hospital billers routinely file incomplete claims to meet timely filing, knowing they will be denied, and knowing they will appeal them later.

The most important thing while avoiding prior authorization denials is never be afraid to appeal a payer’s decision. Phone calls to insurance rep could be time-consuming but can be extremely effective in changing outcomes. Or you can simply outsource your prior authorization requirements to the leading medical billing company Medical Billers and Coders (MBC).

On average, a practice sends 100 prior authorization requests within a month. Your billing staff may not have that amount of time and specialty-wise expertise but our dedicated prior authorization experts do. To know more about our prior authorization services, email us at: [email protected] or call us: 888-357-3226.