Health insurance companies normally require prior authorization for medications, durable medical equipment (DME) and medical services, and insurance authorization services are available to help handle the administrative burden associated with the process. However, the American Medical Association (AMA) notes that prior authorization policies are fraught with problems like inefficiency and lack of transparency, which undermines patient care and costs physician practices time and money. In an AMA survey, 69 percent of physicians reported they waited several days for prior authorizations, and 10 percent said they waited more than a week.
The Medical Group Management Association (MGMA) released the results of a poll earlier this year that revealed the growing extent of the problem. In a Stat poll conducted in mid-May 2017, 86 percent of respondents reported that prior authorization requests as well as other requests from health plans asking for supporting documentation on patients had increased 4 percent in the past year compared to the previous year.
Insurance companies may require pre-certification for outpatient and inpatient hospital services, observation services, invasive procedures, physician-ordered medical tests, clinical procedures, medications, colonoscopies, and medical devices. They will not pay for the service or drug until the physician has submitted elaborate documentation proving the medical necessity of the service or drug choice. In addition to this, preauthorization policies differ among insurers.
A recent report in Becker’s ASC Review says that preauthorization for knee osteoarthritis has become all the more difficult as insurance companies are narrowing the payable diagnosis codes. This means the orthopedic surgeons have to provide a very specific diagnosis of knee osteoarthritis for payers to preauthorize surgery. In other words, many payers do not preauthorize surgery if the diagnosis is simply “knee pain”. Patients will have to meet specific criteria for an osteoarthritis diagnosis. Even a leading insurer like Aetna, according to the report, regards “arthroscopic debridement for persons with osteoarthritis presenting with knee pain only or with severe osteoarthritis (Outerbridge classification III or IV)” to be experimental. Surgeons performing this procedure will find it very difficult to get it reimbursed.
Here are some steps that can physicians can take to obtain preauthorization and prevent denials:
- Be familiar with the coverage and preauthorization guidelines of each payer: Surgeons must be aware of the coverage and preauthorization guidelines for payers and provide the specific diagnosis on their reports. The diagnosis codes reported tell the payer “why” the service has to be performed and helps support the medical necessity of the procedure.
- Take steps to protect against denials: Providers need to have relevant information about the procedures that they routinely perform and enter into the contracting process with this information. They should have evidence to prove the medical necessity of particular procedure as well as reliable resources on coverage for certain diagnoses. Such information would also help during reimbursement negotiations.
- Follow recommended treatment guidelines: Physicians should make sure they are following the recommended treatment guidelines before ordering a high-cost procedure for a patient.
- Meet all payer criteria: Providers should make sure that they meet all of the payer’s criteria before submitting a prior authorization request.
- Ensure preauthorization even for mundane procedures: Two most common procedures that insurers require preauthorization for are imaging procedures such as computerized tomography (CT) scans and magnetic resonance imaging (MRI), and brand-name pharmaceuticals.
- Monitor insurance carrier websites on a regular basis: Checking insurer websites on a weekly basis will help identify issues. Patients can be informed about any issue that would affect them so that they can take it up with their insurance carrier and advocate for themselves and their provider.
- Inform the insurer why the patient is a good candidate for surgery: To support patient inquires, the surgeon and/or referring physician can write to the insurance company justifying the patient’s candidature for surgery. They can pull evidence-based literature to support their arguments.
- Update contracts with insurance companies: Insurance companies may update their coverage policy from time to time. Providers need to track these changes and update their contracts to maintain coverage.
- Know diagnosis codes: This is especially important for orthopedic and spine procedures as many do not have clearly defined codes. The support of an experienced medical coding service provider can prove invaluable when negotiating contracts and while seeking full reimbursement for certain high-volume codes under diagnoses.
- Conduct regular audits: Regular preventative audits can detect issues and help identify typical denial trends for certain procedures. This will allow providers to correct minor problems that may be responsible for a large proportion of the denials. Audits should focus on diagnosis codes and final payment.
One study found that pre-authorization and medical necessity related denials are responsible for more than 11 percent of all denied claims, and that this usually occurs due to failure to secure an authorization in advance. Insurance authorization companies have insurance verification specialists who can help providers address the challenges associated with obtaining preauthorizations. They are highly skilled in the process will call insurance companies and also go through payers’ websites to obtain prior authorizations whenever possible. A reliable insurance authorization company will have experience working with all government and private insurers. Partnering with an expert helps practices minimizes the time and resources required for getting prior authorizations, reduces risks of denials, benefiting both physicians and patients.