WHY PRIOR AUTHORIZATION OUTSOURCING IS CRUCIAL

Posted by Aqkode Healthcare Solution LLC on June 28th, 2022

Pre-approval for nuclear imaging, cardiology, neurology, pain management and all surgical procedures.

How much time does your practice spend on pursuing in-house pre-approvals for nuclear imaging or other cardiology procedures? The pre-authorization process can be valuable for ensuring that a patient’s insurance will cover procedures, but on the other hand, it can be frustratingly time-consuming. Many physicians and administrative staff are finding that the lengthy process of pre-authorization cuts their productivity and turnaround times for care.

For many healthcare service providers, prior authorization can be a daunting task. In fact, medical prior authorization costs so much time and resources that it can offset some of the benefits of healthcare insurance on the part of service providers. Pre-authorizations can be time-consuming and expensive at the same time. Because of this administrative burden, many doctors and health care providers outsource necessary tasks to third-party medical billing service providers to cut operational costs and focus more time on providing better medical services. This article is meant to serve as your guide to understand everything you need to know, and if outsourcing is right for your medical office. First, let’s cover the basics:

What is pre-authorization?

Prior authorization refers to the process of managing the authorization or agreement given to the payer for approval about a medical billing service, procedural, or drug prescription. A payer may give its authorization for service and assign an authorization number that needs to be included on the claim during the submission for payment. In order to have a smooth flow in this process, ensuring the correct CPT code is needed. According to the American Medical Association: “Prior authorization (PA) is any process by which physicians and other health care providers must obtain advance approval from a health plan before a specific procedure, service, device, supply or medication is delivered to the patient to qualify for payment coverage. Other terms used by health plans for this process include “preauthorization,” “precertification,” “prior approval,” “prior notification,” “prospective review” and “prior review.”

Health plans often require this pre-authorization as a method for restricting access to costly services and therapies or checking that a proposed therapy is appropriate for the patient. The whole process can be disruptive and burdensome for physicians and their patients. Common issues include:

• Delayed access for patients to necessary services or therapies. 
• Increased overheads for practices, especially where they need to hire staff to handle pre-authorization duties.
• Uncompensated time for physicians or other practice staff.
• Disruptions to and inefficiencies in the practice workflow.

The use of pre-authorization has been growing and is expected to continue doing so due to demand from health plans looking to lower or minimize costs. Many new therapies and treatments are coming out, but they are very expensive. While the current fee-for-service system remains in place, pre-authorizations will be an expectation.

Why is Prior Authorization Required?

There are several reasons a prior authorization is required. Every health insurance company uses a prior authorization requirement as a way to keep healthcare costs in check. This process will make sure that the service or drug that the physician is requesting is truly medically necessary. Requiring prior authorizations will also ensure that the service isn’t being duplicated. This is a concern when multiple specialists are involved with a single patient. And, this determines if an ongoing or recurrent service is actually helping the patient.