In the complex and dynamic landscape of medical billing, prior-authorization or pre-authorization plays a major role in ensuring an effective communication between your practice and patients’ insurance companies. Prior authorization works as a utilization management tool leveraged by insurance companies to approve certain procedures, services and diagnoses in your practice before providing them to your patients. You must take prior authorization approvals from a patient’s insurance company before prescribing some specific courses of treatments. Always remember one thing that failure to obtain prior authorization approvals can cause your practice to face claim rejections and more out-of-pocket expenses for your patients.
The whole process of prior authorization services requires you to do some critical formalities like submitting comprehensive medical information about your patients, treatment plans, and expected costs to a patient’s insurance company for receiving approvals.
Prior authorization is not a one-step process as it requires you to go perform several stages like submitting detailed information like medical records, diagnostic information, course of treatment and potential costs to the insurance companies.
Before you dig into the more details about prior authorization, you must know the types of prior authorization solutions available in medical billing process.
Types of prior authorization solutions in medical billing:
- Surgical pre-authorization: You need to obtain prior authorization approvals for both the elective and non-elective surgery procedures.
- Diagnostic prior-authorization: Diagnostic pre-authorization is needed for tests like MRIs, CT scans, PET scans, and genetic testing. It makes sure these tests are necessary for accurately diagnosing and treating your patient.
- Prior authorization for treatments: Treatment pre-authorization is needed for therapies like chemotherapy, radiation, and other specialized treatments. It confirms that the treatment is right for your patient based on their condition and past care.
- Medical prior authorization: Before you providing your patients with some specific prescription, especially those are expensive ones or come with specific guidelines; you must obtain prior authorization approval.
Now, it’s time to know about the importance of prior authorization in medical billing:
1) Quality control:
Prior authorization works as a quality control measure taken by the insurance companies. It ensures that the treatment or procedure proposed by you aligns with the established healthcare guidelines, thus reducing the chance of unnecessary or costly care.
2) Effective cost management:
Pre-authorization helps you manage healthcare costs by checking if a service is necessary and covered by your patient’s insurance. It enables the insurance company confirm that the treatment is right and ensures resources are used wisely.
3) Fraud reduction:
Pre-authorization protects you from fraud or overbilling by checking if the treatment is legitimate and preventing unnecessary charges.
4) Enhanced patient safety:
Pre-authorization helps keep you and your patients safe by reviewing medical records and treatment plans. It approves the right treatments and avoids any procedures that could be harmful.
5) Improved financial security:
Pre authorization enables you to know the exact insurance coverage for your patients and also, if there is any out-of-pocket expenses for them, thus helping you reduce the chance of any potential financial surprise for your patients.
6) Better efficiency:
With a management of proper pre-authorization solutions, you can ensure a streamlined workflow and faster approvals before providing your patients with necessary treatment. As a whole, it helps you reduce the administrative hassles.
7) Minimized issues with reimbursements:
Prior authorization allows you to reduce the chance of claim denials or encountering reimbursement problems.
Prior authorization ensures the perfect and cost-efficient care for your patients, thus leading your practice to earn more satisfaction scores from your patients.
Finally, the most crucial part: How prior authorization services work
- Evaluation: You identify the need for a procedure, treatment, or medication, then collect the necessary medical records and documents to support your request.
- Prior authorization submission request: You send the pre-authorization request to the insurance company with all the needed documents. This includes details about why the procedure is necessary, what it is, and the estimated costs.
- Decision based on the PA review: The insurance company reviews your request to check if the procedure is necessary and covered. They might consult medical experts or look at specific criteria to make their decision.
- Final approval or rejection: The insurance company checks your request to see if the procedure is necessary and covered. They might talk to medical experts or review certain criteria to decide.
As you can see managing prior authorization solutions is not a single-resource affair as it requires considerable time and effort. To eliminate additional administrative burnout and hassles, you can outsource prior authorization services to a third-party prior authorization company. The best part of outsourcing PA is that it allows you to completely focus on clinical-care while the prior authorization company takes care of your end-to-end PA and other billing-related responsibilities.
