Medical billing companies continuously work to help physicians reduce claim denials and improve the patient experience with proven strategies such as insurance verification and preauthorization services. Health plans use prior authorization to determine if a prescribed product or service will be covered. Insurance verification specialists help healthcare providers navigate this time consuming and tedious process by verifying patient coverage before a specific service is delivered and obtaining approval from a health plan. This also helps patients get the care they need without delay.

Retro authorization Explained

Prior or pre-authorization involves obtaining approval for the patient’s services prior to rendering them. Many insurers require that authorization for services be obtained prior to or within 14 calendar days of services rendered.

Now, what if the provider could not obtain a pre-authorization before services are delivered?

In rare exceptions and emergencies when preauthorization is not possible, retro authorization approval requests will come into play. Retroactive authorization refers to requests made to the insurance company for approval after patient’s treatment has been provided and the specified period of time has ended.

Retroactive authorizations are given when the patient is in a state (unconscious) or under other extenuating circumstances where necessary medical information cannot be obtained for preauthorization. Retroactive authorization requests may also be used when:

  • the healthcare provider lacks time to obtain prior authorization
  • if a claim is denied based on medical necessity

Insurance providers have rules as to when the retro-authorization request must be sent. For e.g., Beacon Health Options requires that that request must be received in writing no later than forty-five (45) calendar days from the date of service. After the provider submits the retro authorization request, the payer will reimburse the claim based on their standard guidelines.

There are many concerns associated with retroactive authorizations:

  • If a provider makes a mistake and fails to get preauthorization, there is no guarantee that the payer will issue a retro authorization.
  • A denial may be overturned on appeal but payer rules on the retro-authorization process may change and they are under no obligation to make payment if their guidelines were not followed.

Insurance verification and authorization companies stay updated on such changes to help practices that help practices manage the retro-authorization request process efficiently.

Importance of Documentation of “Valid Circumstances”

Retro-authorization requests should be made through the standard authorization request channels – phone, fax, or payer portal. The provider should be explicitly mention in the submission that they are making a retro-authorization request.

Retroactive authorizations are subject to medical necessity review which seeks to confirm that the care was appropriate and was provided at the most efficient and effective level. When making the Retro-authorization request:

  • Providers should ensure documentation of the valid circumstances under which the retro authorization request was made. Most payers will not retroactively authorize routine services except with documentation of valid circumstances. For instance, qualifications for retro-authorization/valid extenuating circumstances set down in a 2018 Nebraska Total Care retro authorization process update were:
    • Services authorized by another payor who subsequently determined the member was not eligible for the services or was not eligible with the payer at the time the services were rendered
    • Member received retro-eligibility from the Department of Health and Human Services, Division of Medicaid and Long-Term Care
    • Services occurred during a transition of care period between two Heritage Health Managed Care Organizations
    • Member was not capable of providing insurance information due to incapacitation
  • Ensure that the codes used to describe the care listed on the submitted bill are coded correctly in accordance with CPT and ICD-10 guidelines.
  • Meet the payer’s timely filing guidelines for claims associated with services subject to retro-authorization.

The request for a retro-authorization only guarantees consideration of the request. Retro-authorizations that are not approved upon review may be appealed.

Outsource Insurance Verification and Authorization – Streamline the Predetermination Process

Managing the challenges of prior authorization and retro authorization processes would be much easier with support from an insurance verification company. Experienced insurance verification specialists call insurance companies and get authorizations in a timely and efficient manner. They will verify if a particular medical procedure is covered and obtain prior approval from the payer to ensure timely and appropriate reimbursement. Leading insurance authorization companies are knowledgeable about government and private insurance guidelines and will ensure that claim requests are submitted with correct information. They work to streamline the prior authorization process, get quick prior approval, and reduce risk of errors and delays. With experts handling these challenging and time-consuming processes, providers can focus on patient care.