Prior authorizations, or Pre-Certifications are a formal permission that allows the provider to see and verify the following; member is active and eligible for services, guarantees to the insurance that the services obtained are medically necessary. While an authorization does not necessarily guarantee a covered benefit, it does give some relief to the provider, that by obtaining an authorization, more than likely a payment will be made. Obtaining authorizations can be a tedious task, but the cost of not obtaining it, is too high to neglect, in any organization.
The process of obtaining an authorization, usually falls on the provider and, in some cases, can be the members responsibility depending on the benefits and contracts. It’s up to the organization to determine the liability based upon the contracts they have with those specific carriers. It’s important to understand what your contracts state, but it’s also important to understand the consequences associated with not obtaining an authorization. Below are two of the most important consequences that can occur in a healthcare organization:
Patient Health & Satisfaction:
Many medications require an authorization from the patient’s insurance. For instance, if the patient is using a medicine that requires regular scheduled intakes, like insulin, and an authorization was not obtained, it could affect the patient’s overall health. Forcing them to take unnecessary measures to ensure their safety.
This not only affects the patient’s health, but it also becomes a driver for the patient’s overall service and experience.
Many times, when an authorization is not obtained at the TOS, whether it is due to misreading a contract, or not understanding the intake forms, or human mistake, patients feel the brunt end. Organizations can see an increase in complaints in where patients are being billed for services, even when they have coverage.
In 2018, a patient filed a lawsuit against Aetna as an authorization was denied and the medical director said in a sworn deposition that the patients’ records had not been reviewed prior to approving or denying the prior authorization request. Although, not every denial will end up in court the patients do suffer when services are not provided or delayed for prior authorization. Burns, J. (2018, March, 28) Aetna’s California Case Puts New Focus on Prior Authorization, retrieved from, “managedcaremag,com”
Increase in denials & Write offs:
Increase in denials, means, less revenue for all. This is one of the leading causes of denials in most healthcare organizations. This means that the process is broken or there is a clear disconnect on the front end, where the services for authorizations are clearly not being obtained, some examples include but not limited to; in-patient stays not correctly calculated or updated, NICU babies not added, obtained for one service, but provided another, EMS services provided and documentation is not clear, or the authorization obtained was for a different date.
These are a few of the biggest denial trends that organizations see, and while many can be overturned, majority will require a write off. This doesn’t mean it’s the end for providers, this just means that there are steps required to ensure necessary measures are taken to obtain an authorization.
As a healthcare provider, these are some of the steps you can take, to help prevent your organization from experiencing the situations above:
- Understand the insurance carrier contracts.
- Read, and train your employees to understand which carriers, and what services require an authorization.
- Create an authorization Matrix.
- A cheat sheet for your intake/registration/scheduling crews to verify quickly what services require authorizations.
- Understand and educate staff on the information that is required in obtaining an authorization.
- Ensure you have the best method to submit the authorization request (online vs. fax).
- Familiarize yourself with the after-hours process.
- Inform your patient on what is needed from them at the time of service, if anything.
- Educate & train staff to understand the beginning to end process in revenue cycle.
- This helps front end staff to understand the total effects of not obtaining authorizations.
Authorizations can be a headache for any organization. However, if you put in place efficient working processes, you will not only improve your patient satisfaction, but lower your denials and write offs to increase revenue streams. It is always better to be proactive rather than reactive. Ensuring your organization is taking all the preventative measures in the beginning, will lessen the burden you feel at the end of the day, and the less of a problem child you will have to deal with.
Burns, J. (2018, March, 28) Aetna’s California Case Puts New Focus on Prior Authorization, retrieved from, “managedcaremag,com”