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Defining Prior Authorization, and When to Use It

Defining Prior Authorization, and When to Use It
Prior authorization may not guarantee reimbursement, but it does make it much easier and can help you avoid claim denials or non-reimbursement.

Some medical services require prior authorization from an insurance company before they can be performed. This is a critical step within the insurance verification service, wherein a typical healthcare plan will specify what services require prior authorization in their medical benefits documentation.

This process helps providers determine what is covered and obtain approval earlier which can help the insurance carrier pay for the treatment or service. This becomes necessary depending on certain conditions like medical appropriateness, benefit limits, and how medically necessary the services are. Let’s dig into prior authorization even more.

Why Use Prior Authorization?

Prior authorization may not guarantee reimbursement, but it does make it much easier and can help you avoid claim denials or non-reimbursement. You first get authorization from a payer, which includes a pre-authorization number. That number has to be included in any claims, which will help you avoid claim denials. If you need to appeal based on the medical necessity of the treatment, you’ll want to include your pre-authorization number there.

Submitting Requests

To submit a request, you can do so by mail or fax. Many companies even offer online forums to help you submit written prior authorization. Each company will have its requirements, but typically you’ll need standard information, including the patient’s demographic info, tax info, an address for services, and a phone number. Depending on the medical treatment in question or the services being provided, you may need additional information, like how long the patient will need to stay at the facility.

What Kind of Services?

Every insurance plan will have a pre-determined set of services or treatments that require prior authorization. However, the factors that most heavily influence whether or not the prior authorization is necessary are costs and risks. Many preferred provider organizations will require prior authorization for inpatient hospital admissions like acute care or rehab facilities. It’s also common for MRIs, CT scans, PET scans, and various medications to require prior authorization. Outpatient emergency services will never call for pre-authorization but staying familiar with the services helps you know when pre-authorization is necessary.

Getting authorization quickly and efficiently is key to providing patients with the necessary medical care. Taking time to pay attention to the process and avoid denials is also paramount. If you need help, consider working with insurance authorization services that can make the process easier for you.

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This entry was posted on Thursday, January 5th, 2023 at 12:10 pm. Both comments and pings are currently closed.