4 Tips to Handle Pre-auth Denials in Billing in Healthcare

According to the Prior Authorization Survey conducted by the American Medical Association in 2020, 94% of the responders said that necessary care of patients suffered a delay due to a delay in prior authorization procedures. The same report also makes a shocking revelation that 30% of patients have been harmed due to lack of care due to a pending case of pre-authorization. For a long time, providers and healthcare systems have been at loggerheads with the insurance panels regarding the various complications of the prior authorization process. While the former claims that the prior authorization of medical services causes unnecessary delay in care delivery, the latter describes the process as a ‘necessary evil’ in process of billing in healthcare.

The main aim of the prior authorization process is to act as a filter to determine the necessity of a medical procedure. There have been various instances of wrongful prescription of medical services for patients who could have been cured with much less complicated methods. The pre-authorization process serves as a checkpoint for the insurance panels to ensure that the patients are rightfully billed for only the services they need. However, communication gaps between the insurance companies and providers often lead to claim denials, adversely affecting the organization’s revenue cycle. Learn how you can handle them with caution.

Statistical Insights

  • The American Medical Association conducted a survey covering the implications of the pre-authorization burden on the provider organizations and patient outcomes.
  • 79% of patients abandoned their course of treatment due to complications in the prior-authorization procedure.
  • 85% of providers said that the prior authorization burden is high or very high on the organization’s performance.
  • Only 40% of providers have an entire team of professionals explicitly working on pre-auth with the insurance companies.
  • On average, healthcare facilities spend up to business days every week to deal with pre-auth issues. Median results show that 40 prior authorizations were filed per week for each provider.
  • 98% of the healthcare plans said they follow evidence-based medicine resources coupled with national health guidelines to design their prior authorization system.
  • However, 32% of the provider respondents said that the required methodology followed by insurance companies is hardly or never evidence-based, thus questioning the clinical validity of the system.
  • 9% of the providers said that delays due to prior authorization procedures led to patients’ disability and permanent body damage.

Ramp up your Eligibility Verification Process

  • You can make prior authorization procedures less complicated by incorporating a detailed information verification process in your workflow.
  • Once the patient’s registration is complete and subsequent steps are discussed with the doctor, ensure that the RCM team has enough resources to check whether any actions need prior notification to the insurance team.
  • Most of the time, teams engaged with billing in healthcare struggle to keep up with the specifications of each insurance company. A significant portion of the billing professionals feels that inability to update the changing rules of the different insurance companies leads to denials.
  • Billing teams primarily focus on medical procedures when dealing with pre-auth issues. Denials can also occur due to order, patient visits, and referrals. Make sure you check all the boxes before moving forward.

Know when to Appeal

  • Appeals processing is a common way of handling any claim denials in medical billing. However, it would help to move forward with increased caution for claim denials due to no authorization.
  • According to a report released by the Office of Inspector General (OIG), 75% of Medicare Advantage Organizations faced claim denials due to pre-authorization issues between the years 2014 to 2016.
  • Only 1% of the providers appealed for the denial among these organizations, and few were successful with their submitted claims. Knowing the required documents to appeal for the denial is critical to ensure its success.
  • Denials management requires specialized professionals to navigate the complexities of the various needs of insurance companies. Ensure that you plan your resources accordingly to maintain a good balance in the system.

Ensure Correct Coding Terms

  • Prior authorization requires a series of documents from the provider’s side. One of the most crucial parts of the application is to ensure that the codes are correct.
  • However, the coding team needs to carefully look into the given medical notes from the provider to ensure that all possibilities following a particular procedure are covered.
  • Experts believe that preparing for pre-authorizing a logical next step in a particular medical process is advisable. There are no penalties for not performing a specific procedure even after taking the prior authorization.
  • For example, a biopsy does not need a pre-auth from the insurance companies. However, an excision of the lesion requires one. If the provider proceeds to perform an excision without prior authorization, the claim will lead to a denial.

Stay Updated on Federal Guidelines

  • It isn’t easy to keep up with the different pre-authorization requirements of separate private insurance companies. Federal guidelines published from time to time will help you stay updated on the documents required for a smooth process.
  • You should evaluate your workflow in frequent intervals to know the pitfalls of the following process. Medical billing professionals think segregating your claim denial reasons could get you a better perspective.
  • Revise and design your workflow according to the standard guidelines of federal agencies like the CMS. You can take the help of resources from several credible data agencies to devise the perfect well-suited plan for your organization.
  • Engage in staff training programs to keep your in-house team on top of the latest guidelines. You can also incorporate AI tools in your workflow management which will ramp up billing in healthcare. These tools save your resources since they automatically learn from their environment and update their work methods.

Get in touch with a leading RCM company to evaluate your current workflow and know your options. Discuss your issues and get a tailor-made plan designed for your organization’s specific needs.

We hope this article helped you understand the different methods of dealing with pre-authorization denials in billing in healthcare. Please write to us in the comment section below if you have any queries. Subscribe to our blog and follow us on LinkedIn, Twitter, Facebook, and Instagram for more articles and news updates.

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