How Crucial is Pre-Authorization in a Medical Billing Service Company?

For a medical billing Service Company, pre-authorization is an important process to deal with. There are many terms used for pre-authorization such as, “prior authorization”, “pre-certification”, “prior approval” etc. Though these terms slightly vary, the process they refer to is all the same. It’s a process where healthcare professionals are supposed to request confirmation that the insurance companies will cover the prescribed medication, service or treatment for the patients.

Especially for the services that insist for a pre-authorization, the patient cannot move forward or access the services from healthcare providers until the request is approved. This process also involves getting an agreement from insurance companies to cover specific services before the performance. Sometimes healthcare professionals leave it in the hands of medical billing service company to finish the process successfully from their end.

Insurance verification and insurance authorization services play a vital role in medical billing process. In fact, most of the claims fall under denials when the pre-authorization is not approved for the patient and he/she isn’t eligible for the services. There are cases where few services don’t demand pre-authorization. But, getting to learn which insurance company requires a pre-authorization is a complex job. Medical billing service company does the needful for healthcare professionals, as they have no time for these processes.

What is the Pre-Authorization process?

  • An important thing to note about pre-authorization is that there no standards nationwide that dictates how requests should be made and how responses are to be delivered.
  • So, a medical billing service company should keep in mind that workflows will vary from state to state and insurance company to company.
  • The process also could be more or less complicated than which is outlined below, depending on its prescription or procedure, or something else entirely.

When is pre-authorization required?

  • Pre-authorization is essential only after the healthcare professionals identify a potential course of action for their patients.
  • In the normal procedure, healthcare professional will seek for pre-authorization from the patient soon after it has been flagged.
  • In few situations, there are times where errors occur when the physicians send their prescription to the pharmacy or when they review patient’s coverage.
  • Office staff must be responsible to check the coverage details and confirm if the pre-authorization is according to the insurance coverage policies.
  • As there are various differences between insurance companies, it can really be a time consuming process.
  • To reduce the burden in such cases, medical billing service company comes to rescue and does the process as required by insurance companies or payers.
  • They contact the insurance companies asking for additional requirements or documentations essential to process the pre-authorization for patients.

Common Procedures that Require Pre-Authorization in Medical Billing:

  • Several insurance companies suggest patients to obtain referrals from primary care physicians before consulting a specialist.
  • Patients admitted in the hospitals apart from emergency care would compulsory require pre-authorization for their treatment.
  • In addition to it, imaging like MRI and CT scans often require pre-authorization or pre-notification. It’s more involved than a referral and less onerous than a pre-authorization.
  • This procedure produces an authorization number which healthcare professionals must use on the claims submitted for revenue payments.
  • Healthcare professionals also have their policies about, how to handle a patient who doesn’t have a referral, pre-authorization and pre-notification.
  • Few healthcare providers postpone their treatment of the patients until their details are obtained properly. Others may go ahead with a procedure and try to retroactively get authorization.

Accurate CPT codes-A key to feasible Pre-Authorization process:

  • Accurate CPT codes are considered as a key to solid pre-authorization. The actual challenge lies when the healthcare professional has to determine the correct CPT code prior to the service or treatment.
  • Medical billing service company can do a better task in determining the specific code required for that particular service. Even the slightest missing or inaccurate coding will not cover the services.
  • Healthcare professionals are mostly advised to check all the possible scenarios before they run the risk of a procedure they had performed won’t be covered.
  • The best way to smoothen the pre-authorization process is leaving it for medical billing service company to obtain the correct CPT code for the anticipated services.
  • For medical billing service company, communication with the physician is essential to know the procedures they are going to perform.
  • It’s absolutely fine and better to authorize treatment than going without pre-authorization and risk of losing revenue payments.
  • During emergency admissions, patient’s coverage won’t be known before healthcare provider’s encounter. Certainly, healthcare providers are supposed to contact insurance companies to get necessary documentations of the patient.

What if necessary documentation is not obtained?

  • If the service or treatment is rendered without pre-authorization, the complete situation depends on insurance company and the policy under which the patient is covered.
  • Few insurance plans reveal that if a patient seeks services requiring pre-authorization, but doesn’t obtain it, then the patient is liable for covering the payment.
  • But, when a healthcare professional neglects or forgets to get the pre-authorization details and when the payment is delayed from insurance, it may fall under collecting directly from the patient which is considered to be a bad option.

How to submit the Pre-Authorization request?

  • Compile the required or requisite documents and start with the submission.
  • At this point of time, most of the necessary details should have been collected of what the healthcare provider believes will be the next course of action along with an explanation for the rationale behind the prescribed course of care.
  • It usually takes 10 business days to approve or deny the pre-authorization. If the request is complete, meets the insurance policies, and falls under coverage outlined in the patient’s plan, then the pre-authorization is likely to get approved.
  • If any additional information is required, the healthcare professional will be approached by insurance company to gather further details.


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