In our series on prior authorization, we have been looking at the issue from the point of view of physicians. It may be instructive to look at the issue through the lens of the insurance company and understand the insurance policy administration process flow. Understanding the health insurance authorization process can help you improve compliance and increase approvals.
What is the difference between a Referral and Authorization in healthcare?
Health insurance companies differentiate between authorizations and referrals. Some things require authorization numbers while others only require a referral. These differ by payor, but some examples of things that only require a referral can include:
- Office visits for local network participating providers
- Ambulatory procedures are local network participating facilities
- Outpatient hospital procedures at local network participating facilities
- Mammography, sleep studies, outpatient diagnostic imaging
Examples of items that might need authorization numbers include:
- Inpatient services
- Speech therapy
- Home services
- Out of network providers and facilities
- Genetic testing
The only way to know if an individual patient’s insurance company requires authorization numbers versus a referral is through a prior authorization system. Detailed information reduces delays in approvals and therefore, delays in the delivery of care.
Centers for Medicare & Medicaid Services VS Commercial Payors
Commercial payors have different prior authorization requirements than Medicare, Medicaid, or Dual Medicare-Medicaid plans. Each plan has specific exclusions that should be flagged by the prior authorization system. Without a cornerstone of detailed information, providers and staff can be initiating patient care without any indication of whether or not it will receive payor approval. That puts the practice and the patient in a financially tenuous situation.
For example, commercial payors may require prior authorization for the following services, while Medicaid may not, depending upon the state:
- Mental health services
- Hip, knee, shoulder arthroscopy
- Genetic, molecular testing
- Medications like Botox
Reducing the Burden of Prior Authorization through Automation
It is literally and logistically impossible for any practice to manually review the prior authorization and notification lists of every payor. Given the number of patients on an average physician panel, the frequent changes that insurance companies can make to coverage stipulations, and the wide number of insurance plans and programs that patients may have, the sheer numbers of variables is daunting.
New drugs may also be added to a payor’s prior authorization list as they hit the market, which could be every month. Given the rate at which new drugs are approved and released, it is impossible to keep up. An in-house automated prior authorization system is the best insurance (no pun intended) that a provider can deliver the best drug therapy to his or her patients.
Specific forms for Successful Prior Authorizations
Half the battle for successful prior authorization is using the right form. These requirements can change on a dime, with both commercial payors and CMS. For example, commercial supplemental insurance may or may not accept CMS forms for reimbursement. Knowing this specific detail through automated prior authorization alerts is essential to avoiding unnecessary denials. For example:
- A Medicare Advantage Organization may or may not use the CMS Advanced Beneficiary notice document. The only way to know that in a timely, accurate manner is with a rock solid, in-house automated prior authorization system.
- With Aetna’s commercial insurance product, a provider must know which plan documents to use and must understand that the company requires electronic submission of prior authorization requests: “A coverage determination is based upon plan documents and (when applicable) a review of clinical information to determine whether clinical guidelines/criteria for coverage are met. Physicians can submit a precertification by electronic data interchange (EDI), through Aetna’s secure provider website or by phone, using the number on the member’s ID card.”
These are just two examples of how lack of compliance with an insurance company’s requirements can hijack even the best submission for prior authorization.
Prior authorization is like the shifting sands. The only way to control the dynamic environment is with comprehensive, detailed knowledge of changes in payor requirements. When an in-house system automatically keeps you on top of changes in documentation and forms, you can comply. That means your rate of prior authorizations is more successful, which leads to higher revenue and streamlined patient care.