- What is Prior Authorization in Healthcare?
- Why Prior Authorizations are Hard to Manage
- Prior Authorization Denial Reasons
- Best Practices for Avoiding Prior Authorization Denials
As a medical provider, your top priority is helping your patients improve their health and wellness. When prior authorization requests prevent you from providing the right level of care, it goes against everything you work for.
If the requests get denied, it just adds to the delays or even puts you back at square one. You may then wonder why that happens anyway—and how to avoid it. While it’s not possible to avoid all prior authorization denials, there are ways to improve approval rates for your patients.
To do that, you must first understand the most common reasons why denials occur. Only then can you put the best practices to work for your patients, improving their chances of getting the best treatment outcomes. Here’s what you need to know.
What is Prior Authorization in Healthcare?
In healthcare, prior authorization is a decision made by the insurance provider on whether to cover the recommended healthcare services. Depending on your patient’s care needs, certain medications, diagnostic tests, procedures, or medical equipment may require prior authorization.
Failing to get approval before providing care will result in denied claims. So, it’s important to complete the pre authorization process before moving forward with treatment. If you’re not in your patient’s insurance network, they will need to complete the pre-authorization steps instead.
Either way, you can expect the insurance company to take at least two days to approve or deny the request. If the request gets denied, you may need to submit more info to show why the proposed treatment is the best course of action for the patient’s well-being. This adds even more time to the clock, resulting in unnecessary treatment delays and disruptions.
Why Prior Authorizations are Hard to Manage
Prior authorizations are time-consuming for providers, costly for the healthcare practice, and potentially detrimental to the patient. Even a basic authorization request takes between 30 and 45 minutes to complete. This takes away from your ability to care for more patients each day, impacting community health and your facility’s bottom line.
When dealing with complex medical issues, the burden is even higher. To treat a patient with resistant hypertension, you may need to compile all the past medications used by the patient, make multiple phone calls, and fill out over an hour of pre-authorization paperwork.
All the while, your patient goes without the pre authorization medication they need, allowing their blood pressure to remain out of control in the interim. Specialty pre authorization medication is not the only thing getting delayed either. Many effective diagnostic tests, surgical procedures, and durable medical equipment all require prior authorization before patients can move forward with the care process.
Prior Authorization Denial Reasons
Prior authorizations are all about the insurance company determining what’s medically necessary for your patient. Above all else, they want to make sure that you’re providing the most cost-effective treatment.
Other common reasons for preauthorization denials include:
- Misspelled names, incorrect billing codes, and other clerical errors
- A lack of info about treatment alternatives already tried by the patient
- Missing info about the proposed treatment and why you’re recommending it
- Absence of evidence-based clinical guideline data provided in the paperwork
The good news is that you can appeal pre-authorization denials by submitting a written challenge. You will need to provide even more info than given on the original form, so plan for this process to take up to two hours to complete.
Best Practices for Avoiding Prior Authorization Denials
In a recent survey, about 13% of enrollees in the Medicare Advantage plan stated that they received a pre-authorization denial for a service that should have been approved. These erroneous denials may have resulted from incomplete patient data, procedural errors, and other mistakes in the process.
Ways to avoid erroneous prior authorization denials include:
- Double-check the billing codes
- Use the correct spelling for all names
- Fully detail why you’ve recommended the treatment
- Outline any treatments the patient has already tried and failed
- Back up your claims with evidence-based clinical guidelines
Having the right revenue-cycle processes and software in place can also help you overcome the challenges in denial management.
In addition, remember to wait for the prior authorization approval to come through before completing the procedure in question. Otherwise, the insurance provider will deny coverage and leave you holding the bill.
Overall, it’s best to plan for pre-authorization issues during the treatment process. Despite your best efforts, insurance providers commonly deny the request in hopes you’ll find a more cost-effective solution. If you properly budget for the extra time, you can work through the steps to get your patients the care they need.
Keep in mind that a medical billing service can help streamline the pre authorization process. The revenue-management software helps prevent denied claims and other issues by effectively organizing all your data and improving your processes. This will help improve your workflows while ensuring patients get great care outcomes.
Pre-authorization issues can impact your workday and get in the way of properly caring for all your patients. Following industry best practices can help you minimize pre-authorization denials, but you’re still out all the time dedicated to completing paperwork.
To avoid prior authorization denials and outright denied claims, remember to:
- Proofread the paperwork to check spelling, billing codes, and other data
- Outline why you recommend the service using evidence-based clinical guidelines
- Describe all the different care methods used for the patient prior to this course of action
Beyond that, you can overcome denial management challenges by putting revenue-cycle processes and software to work for you—and we’re here to help. Our PrognoCIS EHR software is custom-tailored to your practice, giving you more control over your workflows, revenues, and more.
Ready to get started? Request your demo today to see how our software can help you avoid and manage prior authorization denials.