Understanding The Prior Authorization Process

Prior authorization plays a crucial role in the healthcare revenue cycle. This process involves getting approval from the insurance company before moving forward with a specific procedure or medication. Without this prior approval, the insurance company may not pay for the procedure or medication and the patient may end up paying the full bill. Prior authorization is sometimes referred to as preauthorization or precertification or preapproval. No matter what it’s called in the healthcare industry, it is an administrative burden for medical practices. Due to its time-consuming nature, medical practices take up to two business days to comply with health plans and prior-authorization protocols – time that could otherwise be spent on patient care activities.

Why Is Prior Authorization Needed?

Insurance companies may require prior authorization for several reasons. It serves as a cost-control strategy to regulate spending and encourage more cost-effective medical treatments. By using prior authorization, the insurance company aims to ensure that

• The procedure or medication or test or device is medically necessary based on the patients circumstances
• Recommended for the current medical problem the patient is dealing with
• The most affordable option available for treating the condition
• Medications aren’t being duplicated, especially when multiple specialists are involved in care
• An on-going or recurring service is proving beneficial in making measurable progress.

According to Cathryn Donaldson, Communications Director at the American Association of Health Plans (AHIP) prior authorization protects patients and ensures that they receive safe care that is deemed “medically necessary” and appropriate.

Is Prior Authorization Needed In Times of Emergency?

Prior authorizations are not necessarily needed for emergency situations that call for immediate care and treatment to avoid jeopardy to the life or health of the patient. Because, a delay in providing care due to administrative tasks related to prior authorization can lead to serious medical consequences. So, when it comes to dealing with emergencies physicians always act fast to provide critical, life-saving care regardless of prior authorization requirements and insurance company policy rules. In fact, a preauthorization for emergency medical care is strictly forbidden by the Affordable Care Act.

What Kind Of Treatments And Medications Require Prior Authorization?

• Medications that could be potentially harmful and unsafe when taken together with other medications
• Less expensive alternatives available that offer the same efficacy as the expensive treatments
• Medical treatments and medications that should only be used to treat specific health conditions
• Medications that are often misused or abused and can lead to an addiction
• Medical treatments or medications that are used to beautify and improve one’s appearance

What Are The Challenges With Prior Authorization?

The prior authorization process is time-consuming as the physician staff has to fill out a lot of paperwork for payor approval, causing errors and delays. Moreover, prior authorization rules differ by state and from one insurance plan to another. Payor rules continually evolve and physicians find it difficult to keep up with it. Because of its lengthy intricate steps, it can disrupt or delay a patient’s access to vital care and also increase overhead cost and administrative complexity. In an AMA survey, 64% of physicians reported waiting at least one business day for prior authorization approval and 30% reported that they had to wait for two to three business days. The same survey revealed that 84% of physicians found that the administrative burden associated with prior authorizations was significantly high and 92% noted that prior authorizations led to adverse patient outcomes. Additionally, 86% of physicians observed a significant increase in the prior authorization burden over the past five years, as the number of medical procedures and prescription medications needing approval increased.

The PA Flow Chart

• First, the healthcare provider decides on the procedure, medication, test or device the patient needs.
• The healthcare provider checks the healthcare plan’s policy rules or the formulary to understand if prior authorization is needed. If yes, the provider will submit the request along with all supporting medical documentation.
• The provider staff usually manually checks the prior authorization rules for the insurance plan associated with the patient.
• Payor rules are not standardized. It varies from health plan to health plan and sometimes even rules vary from plan to plan within a specific payor.
• If the provider decides that preauthorization is not required, then the claims can be submitted to the payor.
• On the other hand if the provider confirms that prior authorization is needed, the CPT codes applicable for the prescribed treatment are tracked down. Then they have to get the prior authorization number that is assigned by the payor indicating that the services provided on this claim have been duly authorized.
• It is the responsibility of the provider to continuously follow-up with the insurance company until the prior authorization is resolved – whether it is approved, denied, or redirected.

Why Outsource PA Process?

Physicians didn’t go to medical school to spend their precious time managing or waiting for prior authorizations. But these days it feels like they are meant to be. As a physician your time and attention should be focused on caring for patients rather than managing insurance prior authorization paperwork. Prior authorization is notoriously tedious and time-consuming. – from getting the documents right to dealing with long waits, it takes time away from patient-focused activities. Outsourcing your prior authorization process to Physicians Angels allows your practice to focus on providing exceptional patient care. Our pre-authorization specialists are adept and familiar with the necessary processes, ensuring faster and smoother approvals. Hence, outsourcing prior authorization to Physicians Angels is the wisest decision you can make to save time and minimize the hassles of dealing with payors. Sounds interesting? If you’d like to know more on how our specialists manage the entire PA process get in touch with us today.