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Prior Authorizations: How to Arm Physicians with the Critical Details

Keeping track of prior authorization policies is difficult. Each health plan has its own set of requirements, which often change with regularity. Some Medicaid payers, for instance, want one “blanket” referral authorization before patients see certain specialists; the specialist isn’t required to obtain prior authorizations for every procedure. Other plans are much more restrictive, approving prior authorizations for specified procedures only when certain criteria/diagnosis’ are met.

The problem, of course, is that failure to obtain proper authorizations can have a drastic affect on practice income. The bottom line is simple: no authorization, no payment. Insurers won’t pay for procedures if the correct prior authorization isn’t received, and most contracts restrict you from billing the patient as well.

Here’s an example: I once worked in an OB/GYN practice that specialized in high-risk pregnancies. In some cases, providers wanted patients to come in for weekly follow-up ultrasounds that the providers felt were medically appropriate. However, some payers would authorize the services only once every two to three weeks. Staff and providers would spend valuable time appealing and performing peer reviews. Literally thousands of dollars were on the line—not to mention, lost revenue due to the amount of time providers were spending on peer reviews.

So, what is a physician to do? I suggest three things:

1)    Designate someone to oversee all authorizations. Physician practices must focus on checking patient insurance coverage on the front end. Frequently updating the practice management system with information about patient insurance coverage can help. But it’s still important to appoint one person or team to manage all authorizations. Dedicated staff have a better understanding of each payer’s unique requirements, and can better fight authorization denials as well. These staff members must be knowledgeable about each payer’s requirements, track the authorizations allowed/used for procedure codes/visits and be diligent about doing everything possible to obtain authorizations.

2)    Open the lines of communication. Two-way communication between physicians and authorization staff is critical. Providers should document completely and tell staff why a patient is being seen, so staff can inform providers about the treatment options the patient’s payer will accept. Think about the OB/GYN scenario discussed earlier. This kind of discussion would have armed physicians with the knowledge that weekly ultrasounds were unlikely to be paid. They could then choose to proceed despite the financial loss, or to alter the frequency of services.

3)    Set the authorization process in motion quickly. I recommend developing a spreadsheet (cheat sheet) that lists the guidelines for authorizations of your payers —and what codes require authorization. The spreadsheet should explain what justifies medical necessity for each procedure according to each payer. Use this tool to swiftly decide when to submit an authorization request.

As practices become more automated, there undoubtedly will be newer and better electronic tools to help manage authorization requirements (some practice management systems offer utilization management capabilities). Notes, messages and front-end code edits in EHR and practice management systems all help. But right now, knowledge is still king. Winning the authorization battle requires staff who know the ropes and use ongoing communication skills to help physicians scale them.