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All You Need To Know About Pre-Authorization Services In Medical Billing

The definition of Pre-Authorization as per CMS is a process through which a request for provisional affirmation of coverage is submitted to CMS or its contractors for the purpose of review. This happens even before the item or service is furnished to the beneficiary and the claim is submitted for processing. Through this process, the submitter (e.g., provider, supplier, beneficiary, etc.) is permitted to send medical documentation in advance for an item or service and to verify its eligibility for Medicare claim payment. Contractors are directed to conduct pre-authorizations and convey if there is any potential issue with the information submitted.

Therefore, Pre-Authorization is a process to get the insurance payer to sign an agreement to authorize the payment for medical service received by the patient. The term Pre-Authorization is also used as authorization, prior authorization, or pre-certification.

Why Do Healthcare Insurers Need Prior Authorization?

Prior Authorization is used by healthcare providers to make sure that a specific service is really needed, and it is worth the cost. The main motive is to keep healthcare costs in check. The process also helps to prevent too much spending that is not needed. Through the process of Prior Authorization, it is ensured that only people who get the drugs or services are the ones for whom it is appropriate.

The primary idea is to make sure that patient care is cost-effective, necessary, and appropriate for every patient. Throughout the process of prior authorization, the insurer will make sure that certain criteria are met.

Role Of Pre-Authorization In Medical Billing

The Role of Pre-Authorization in Medical Billing can be explained with the following points:

Assurance Of Reimbursement

Pre-authorization is a smart way to get assurance that the payer is obliged to make a payment as per the signed agreement.

Prevents Denied Claims & Frauds

It helps in the identification of insurance details which means it prevents insurance fraud by eliminating false insurance claims. In the same manner, it helps to prevent denials by making the insurance payer sign a legal document ensuring that the payer can’t deny the payment.

Insurance Verification

One important thing to note is that preauthorization is a process that is a part of the insurance verification process itself. Therefore, it ensures that the insurance details of the patient are valid.

Tips To Prevent Denials In Pre-Authorization Process

Submit The Request Beforehand

The provider must ensure to submit the request beforehand. It should be done prior to performing the medical procedures. Getting prior authorization for the required procedures is the only way in which a provider can secure reimbursement.

Preauthorization Number Is Crucial

There are times when providers skip the pre-authorization number on the claims form by mistake. Missing pre-authorization can be one be the reasons that results in denial of claims. This is because it indicates that the procedure was performed without authorization. So, it needs to be ensured that the pre-authorization number is mentioned.

Cross-Check The Form For Errors

If there is any error in the pre–authorization process, it may cause two issues – Your request for pre-authorization can be rejected, and secondly it can delay the reimbursement.

Submit Required Information Properly

The documents have to be submitted as per the demand of the insurance payer. It is important to support the medical services/procedures that are being provided to the patient.

Services Where Pre-Authorization Is Necessary

There are certain services, tests, and procedures where prior authorization is much more needed than others. Various examples where prior authorization is required before approval includes:

  • Diagnostic imaging (such as MRIs, CTs, and PET scans)
  • Home health services (such as nurses)
  • Rehabilitation (like physical or occupational therapy)
  • Non-emergency surgery (elective surgery)
  • Durable medical equipment (such as wheelchairs)

How Much Time Does A Prior Authorization Take?

The time frame for pre-authorization depends on the urgency of the need for treatment, the place where you live, and what type of health coverage you have. If you are under a health plan that is state regulated, the rules of the pre-authorization process will vary from state to state.

The speed up your prior authorization process tell your provider's office that you need prior authorization as soon as possible, be organized, keep track of due dates, and make sure all the paperwork you need to fill out is completed accurately.

Bottom Line

In short, Prior authorization is the process where a health provider needs to get approval from a patient’s health plan before moving ahead with a treatment, procedure, or medication.

Different health plans have different rules for prior authorization. If prior authorization is required and is not done, the insurance provider can reject the claim—even if the procedure was medically important and would otherwise have been covered. If, by any chance, the insurer denies the coverage, make sure that you ask to appeal the decision.

The fact is that standardizing the best practices for prior authorization can take a lot of time as it involves various complex steps. The most common cost-cutting strategy is to outsource your pre-authorization process. However, you need a reliable outsourcing partner that focuses on increasing operational efficiency and sustained growth. Eminence RCM is one such reliable medical billing option that renders smooth pre-authorization services to healthcare providers.

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