Have you ever heard of pre-authorization in medical billing services and why it is an important step that cannot be skipped? Doctors and other medical providers are required to do it to avoid insurance claim denial of specific medical procedures.
The dream and priority of every healthcare provider is to give their patient the best treatment and ensure they are satisfied. However, the reality and long process of medical billing and insurance regulations can affect how they function in their practices.
In the healthcare industry, an extra step must be carried out before healthcare providers provide specific medications and treatments.
In this blog, Unify Medicraft takes us through everything you need to know about pre-authorization in medical billing services, how it works, its challenges, and the importance of partnering with specialized pre-authorization service providers like Unify Medicraft.
What is Prior Authorization in Medical Billing?
Prior authorization in medical billing is the process of asking for approval from a patient’s insurance company before providing certain services. It is done in order to validate and approve medical procedures, treatments, and services before they are performed.
How Does Prior Authorization Work?
In prior authorization, doctors must get approval from insurance companies before certain procedures, medications, or medical equipment can be provided to patients.
Prior authorization is usually a frustrating process for patients and healthcare providers and here is a breakdown of how it works:
Patient Evaluation
The healthcare provider checks the patient and recognizes that the patient needs treatment that requires a specific procedure, test, medication, or medical device.
Insurance Eligibility
The healthcare provider then reviews the patient’s insurance plan and policy to know if they need to submit a prior authorization form before they can perform the treatments.
Request Submission
The provider submits relevant medical records and other important documentation that shows the patients need the treatment and sends it with a pre-authorization form to the patient’s insurance company and waits for the insurance company’s decision. The forms also describe the medical procedure and estimated costs.
Review and Decision
The insurance company reviews the request by checking the patient's medical treatments, documentation and coverage eligibility. They review other specific criteria before they make an informed decision.
Pre-authorization Approval or Denial
The insurance company tells their decision to the healthcare provider and the patient. If it is approved, the provider can go on with the requested procedure or treatment. If denied, the provider can appeal the decision or look for other ways to treat the patient.
Types of Prior Authorization in Medical Billing
Prior authorization in medical billing is used by insurance companies to control expensive medical treatment carried out by doctors and also ensure patient needs the treatment recommended by their healthcare professionals. Here are some of the types of prior authorizations:
Medication Prior Authorization
The sole purpose of healthcare providers is to prioritize patient safety when recommending drugs. This is why medication pre-authorization has become a must to ensure patients who are given medications with high side effects are necessary and effective for the treatment of their condition.
The types of medications include the following:
- Medications that can be abused, overused, or misused
- Medications with more cost-effective options
- Medications that can be addictive
- Drugs for cosmetic use and rehabilitation
- Medical equipment and diagnostic imaging
- Healthcare services for home
- Non-emergency surgery
The Process of Medication Prior Authorization
When a healthcare provider prescribes medication for their patient, the pharmacist checks if the medication needs prior authorization before it is given to the patient. If yes, the healthcare provider then provides all the necessary documentation to process and approve the pre-authorization. The pre-authorization is then submitted through email or mail and waits for approval from the insurance company.
Prescription Prior Authorization
Prior authorization for prescription is done to make sure prescriptive drugs are used for the right reasons. This process makes sure healthcare providers does not give their patients drugs that are not the perfect choice for their health condition and ensures they give their patience medication with a lower side effect.
The Process of Prescription Prior Authorization
After receiving a patient's prescription, the pharmacist checks if the patient’s insurance plan needs prior authorization for the medicine. If it does, the pharmacist will communicate the message to the doctor who prescribes the medicine.
The healthcare provider then provides all the necessary documentation to process and approve the pre-authorization. After approval, the prescription is given, however, if it is denied, the doctor will need to prescribe an alternative.
Insurance Prior Authorization
Before any doctor gives their patient specific medication or treatment, they must first check if the patient's insurance plan needs pre-authorization. If it is needed, all the necessary details about the patient’s condition and the medical necessity of the procedure are submitted to the insurance company for approval. The insurance company will go through the pre-authorization that is sent by the doctor and make a decision if they will pay the medical bill or not.
The Process of Insurance Prior Authorization
Before starting some specific medication or treatment, healthcare providers must first check if the patient's insurance plan needs pre-authorization.
If it is needed, all the necessary details about the patient’s condition and the medical necessity of the procedure are submitted to the insurance company for approval. The insurance company then review the pre-authorization and determine whether they will pay for it or not.
How Important Prior Authorization in Medical Billing?
As a medical provider, understanding prior authorization in medical billing before considering a medical procedure for a patient is very important. You must know if their insurance covers the procedure you want to perform and the money the patient has to pay after the treatment.
According to statistics, many people living in the United States have medical debt on their credit records in 2021. Therefore, knowing these answers will save the provider's revenue and prepare the patient for the financial debt they will have to pay after their treatment.
What Challenges Faced During Prior Authorization in Medical Billing?
Staff Burden
Many healthcare providers do not have the necessary staff to run their practice effectively and the resources to train their administrative staff. Also, prior authorization is very time-consuming and often takes a lot of back and forth with insurance companies which can be frustrating. During this long process, staff can make errors like writing incorrect billing codes or missing information in the Prior Authorization request, leading to rejection.
Changing Insurance Regulations
One of the most common prior authorization challenges is the constant change in the medical billing regulations by the insurance company. Also, patients have a different insurance plan with different requirements for treatment and procedures. This makes it difficult for healthcare providers to keep and know when and when not to file for a prior authorization for their patient.
Coverage Issues
With many procedures, medical equipment, treatment, and changing regulations, it is often difficult for healthcare providers to navigate the complexities of prior authorization. For example: many cosmetic surgeries do not always have insurance coverage.
Also, some treatments that are not approved by the Food and Drug Administration often require prior authorization. Furthermore, some medications are covered under pharmacy and the devices used with them require prior authorization before it is given. These coverage issues can be confusing and very challenging to deal with for healthcare providers.
Insufficient Information
When filling out a prior authorization, healthcare providers must ensure patient details are correct and every detail of the medication and treatment is mentioned. If there is any form of coding error or patient misspelling of patient information, it can lead to prior authorization denial.
What Happens If Your Pre-Authorization Is Not Done?
When a healthcare provider does not get approval from an insurance company through pre-authorization before treating their patient, it can lead to a claim denial or partially approved reimbursement.
Although claim denial cannot be totally eradicated by healthcare providers, it can be minimized by ensuring a prior authorization process is done for the recommended treatment, procedures, and requirements.
How to Improve Prior Authorization in the Medical Billing Process?
Documentation
Submitting complete and accurate documentation will help improve your prior authorization in the medical billing process. Any incomplete documentation or coding error during prior authorization will end up as a rejection.
Automate Prior Authorization Process
Prior authorization takes a long time when it is done manually, therefore automating the process ensures speed and accurate processes. This process gives everyone involved in the prior authorization process access to see the information on time, improving response times.
Reduce Services That Requires Prior Authorization
Having too many procedures and treatments that need prior authorization can lead to delays and affect patient satisfaction. Therefore, it is advisable to reduce services that need prior authorization by checking prior authorization requirements before providing any services.
Let Professionals Handle It
The best way to ensure your prior authorization process is accurate and fast is by working with professionals that have expertise filling it like Unify Medicarft. We will help process your patient's prior authorization and give you time to focus on delivering exceptional care.
How To Avoid Problems in Pre-Authorization Approval
Provide Complete Information
Providing all the necessary information when processing pre-authorization for a medical procedure helps to avoid any problems. For example: having copies of your insurance card, identification, and any other documentation that may be needed.
Also, understanding patients' insurance coverage and procedures that need pre-authorization in their health plan avoids any form of delay.
Follow Insurance Guidelines
Every insurance company has guidelines for different treatments and following these guidelines ensures your prior approval is approved. Healthcare providers must know and understand insurance guidelines on prior authorization before starting the process.
Frequently Asked Questions about Prior Authorization in Medical Billing
What is Authorization Denial in Medical Billing?
Authorization denial in medical billing is the process whereby insurance company denials the approval of a healthcare provider to carry out a treatment or prescribe their patient a specific medication.
What is the Authorization Number in Medical Billing?
The authorization number in medical billing is the number given to healthcare providers by the insurance company after their prior authorization process is approved.
How Long Does It Take for Prior Authorization?
Prior Authorization can sometimes take days or weeks depending on the process and the complexities of the treatment mentioned.
What are Some Common Services That Need Prior Authorization?
- Diagnostic imaging
- Durable medical equipment
- Rehabilitation
- Home health services
- Non-emergency surgical procedure