Prior authorization and prior authorization are often used interchangeably and refer to the same thing, as do terms such as prior notice and prior review. Referral occurs when a referring provider recommends a patient to another provider for care, often in another specialty. This requires the order supplier to submit documentation to authorize the appointment. This delay can cause problems for both patients and the healthcare professionals who care for them. Patient adherence to medication and treatment often decreases when obstacles such as delays or additional measures are introduced.
It also saves time for doctors and the revenue cycle team that supports them and who could better spend it caring for patients. As an unwanted side effect of delayed care while a prior authorization is being reviewed, some patients seek treatment in an emergency room; a decision that often results in them receiving a large and unexpected bill that their health plan does not cover. Any error contained in the prior authorization form, from egregious to innocuous, may indicate its denial. A number that appears on a patient's medical identification card can be transposed. The middle initial may have been entered incorrectly.
A good example of this dynamic is the common practice of ordering providers to refer diagnostic tests (blood, tissue, urine, etc.) to the laboratories, which provide the service. The volume of medical procedures and prescription drugs that require prior authorization is increasing significantly. This is largely because insurance companies are looking for ways to control the rising costs of health care, especially those associated with new innovative specialty drugs or emerging technologies. While these drugs or services have been shown to improve patient outcomes, they often cost too much and are often too new to have a proven track record. This is especially true in the case of specialty pharmacy drugs that are protected by patents. Doctors and other health care providers don't usually charge for prior authorizations.
Even if they wanted to, most contracts between suppliers and payers prohibit such practices. However, there are some cases, such as when a patient is out of the network, where it may be appropriate to charge for prior authorization. In this scenario, the doctor would not have a contract with the patient's health plan and, in theory, could charge for prior authorization. If treatment requested by a provider on behalf of a patient is not considered medically necessary, the health plan will deny it for those reasons. However, if the reason for the denial is because clinical or benefit information for members is incomplete, it may result in an administrative denial. Sometimes, prior authorization requirements aren't determined until after treatment is complete.
This causes payers to retain some or all of the expected refund. If this is the case, providers often have to request payment directly from patients, a strategy that often results in offices writing off bad revenues such as bad debts. However, medical decisions can be complex and cannot be easily summarized in a computational “if this, then that” query. For the many care decisions that fall within a gray area, editing the claims won't be enough. These scenarios, in which the determination of medical need is more nuanced, will often require prior authorization.Some requests for prior authorization filed electronically can be awarded using algorithms, especially for simple, lower-cost procedures and medications.
If a request for pre-authentication appears to be about to be rejected after being computationally examined, it can be referred to a payer's non-clinical administrative staff for further review. Medicare, the traditional program offered directly through the federal government, doesn't usually require prior authorization, even for expensive procedures, such as surgeries. It can even cover expensive tests, such as MRIs, if they are requested to diagnose a condition. Medical necessity is a legal principle that applies to clinical situations and provides a perspective through which to evaluate the care provided by a doctor or other provider to a patient. It is used in accordance with generally accepted medical standards to evaluate specific diagnostic and treatment recommendations. If the prescribed care does not meet the threshold of being medically necessary, insurance companies will not reimburse it. Some providers with a history of high pre-authorization approval rates receive “gold card” status and do not need to comply with the same pre-authentication rules that are required of others.
The same is true for hospitals and health systems with major brand names that health plans covet for their networks. Emergency rooms and other trauma-related care are also exempt from prior authorization, as there is too much at stake to wait for the payer's approval. Prior notification requests that were previously rejected may be resubmitted and possibly authorized. Sometimes the timing of the presentation plays a role. For example, if a patient's condition worsens or the current treatment regimen isn't effective, the payer may be more inclined to approve the request for prior authorization. It's quite common for a request for prior authorization to be approved only for the patient to forego the procedure or medication.
In this case, the payer does not need to reimburse the supplier. Alternative care facilities such as diagnostic and genomic laboratories do not usually communicate directly with patients. Instead they rely on a source provider such as a hospital or doctor's office to refer businesses to them and communicate with patients on their behalf. This commercial relationship in which the laboratory is one step away from the patient introduces an additional level of complexity when it comes to prior authorization. If there is a single error in the pre-authorization process then the diagnostic or genomics laboratory now has to work with the reference provider as an intermediary and trust him/her to resolve any issues with the insurance company. Because healthcare providers rely on referrals from original providers they know that they can only pressure referring hospitals and doctors to a certain extent or risk losing customers. In conclusion it is important for healthcare providers who accept private health insurance plans understand what services require pre-authorization before providing them so they can avoid any potential issues down line with reimbursement from insurance...
