The medical billing and coding process is complex and requires precision and accuracy to ensure claims are settled properly. One of the most important elements of this process is prior authorization, which requires the insurance carrier's approval for the treatment of specific services. Mastering prior medical billing and coding authorizations is essential for a successful and accurate claims settlement process. In this blog post, we'll explore the process of obtaining prior authorization and the importance of understanding it in medical billing and coding.
What is prior authorization?
Prior authorization is crucial in medical billing and coding, particularly when settling insurance claims. It involves obtaining approval from the insurance carrier before providing specific medical services or procedures to a patient. The primary goal of this process is to ensure that the treatment is necessary, appropriate, and cost-effective.
Getting approval from the payer beforehand increases the likelihood of a smooth claims settlement. The procedure involves obtaining an authorization number, which providers must include on the claim during submission. Failure to obtain prior authorization can result in claims denial, leaving the provider to bear the cost of the treatment.
Providers must be aware of pre-authorization guidelines and payer coverage and provide the specific diagnosis on reports. The prior authorization process can be time-consuming and involve administrative hassle, as it requires significant paperwork, back-and-forth communication with the payer, and coordination with the patient.
It is worth noting that the process of prior authorizations can disrupt or delay a patient's access to vital care. As such, it is crucial to streamline the process as much as possible while ensuring patients receive the care they need promptly.
The Pandemic Effect?
The COVID-19 pandemic has disrupted the healthcare industry in more ways than one. One significant effect has been increased prior authorization requirements, causing delays and headaches for healthcare providers and patients.
According to a survey by the Medical Group Management Association (MGMA), 81% of medical groups reported increased prior authorization requirements since the pandemic's start in 2020. This increase has made it even more challenging for healthcare providers to manage their workload and care for patients during stressful times.
One factor contributing to the rise in PA requirements is the overwhelming influx of COVID-19 patients. Healthcare providers have had to divert staff to manage the influx, leaving fewer people to handle other tasks, such as prior authorization requests.
States have recognized the challenges posed by the pandemic and requested that insurers temporarily waive prior authorization requirements. However, many insurers have been hesitant to accept the appeal. The insurance industry fears that waiving PA requirements will lead to a rise in unnecessary and costly medical procedures.
Each state is taking its approach to a temporary policy change for PA requirements, adding to the uncertainty for healthcare providers. Some states have implemented blanket waivers, while others require that each PA request be evaluated on a case-by-case basis.
Prior Authorization Best Practices
Prior authorization is a critical medical billing and coding step that can make or break claims approval and reimbursements. For this reason, providers must become familiar with the best practices for obtaining prior authorization to streamline the process and maximize revenue.
One crucial aspect of prior authorization is that providers must have sufficient evidence to prove the medical necessity of a procedure. This means having thorough documentation, such as medical records and diagnostic test results, that supports the need for a particular treatment or service.
Another key factor in obtaining prior authorization is first-hand knowledge of payer criteria. Understanding the requirements of insurance companies and Medicare is crucial to ensuring all necessary steps are taken to meet their criteria for approval. Providers must know which procedures require prior authorization, which may vary between payers, and which services are covered under the patient's plan.
Even routine procedures, such as imaging processes, require prior authorization. It is vital to have all the necessary paperwork in place to ensure timely approval and avoid unnecessary delays that can negatively impact patients and practice operations.
One recommended best practice is to conduct regular audits to detect problems and determine the cause of prior authorization denials. This information can help providers address the underlying issues that prevent claims from being approved and implement corrective action to streamline the prior authorization process.
In summary, mastering prior medical billing and coding authorizations requires attention to detail and knowledge of payer criteria. It is essential to have sufficient evidence to prove medical necessity and know which procedures require prior authorization. Providers should conduct regular audits to detect and address any problems impacting their claims' approval and maximizing their revenue.
Can I outsource Prior Authorization?
One of the biggest challenges of medical billing and coding is prior authorization. The process can be time-consuming, and errors can cause delays and even denials of claims. Outsourcing may be the solution you need if you are a provider struggling with the complexities of prior authorization.
Standardizing best practices for prior authorization could take years and involves multiple, complex steps. However, modern outsourcing medical billing and coding partners such as Proclaim Billing Services can take over the process for you. They have experts who can ensure your claims get approved promptly.
While outsourcing was previously used as a cost-cutting strategy, operational efficiencies, and sustained growth are now more important. With the healthcare environment changing rapidly, outsourcing can help providers focus on their core services and compete effectively.
Outsourcing to a medical billing and coding partner provides you with experts in prior authorization and streamlines your revenue cycle management process. You can focus on patient care and let the partner handle billing and coding.