A walk through the basic practice of revenue cycle management which is prior authorization. Discussing the pros and cons of the process along with a brief history of the same, the present situation and future possibilities. Added with it a basic frame work of what it takes for a successful prior authorization process to complete.

What is prior authorization?

Prior Authorization is the practice of ensuring the insurability of the claim components of a medical insurance. As practiced in the United States of America, the economy of the medicine industry is heavily based on the health insurance standards. The medical compensation procedure is thus exchanged between the service provider and the insurance payer with the patient furnishing the code for his health insurance policy. The revenue cycle management companies process the code and act as the mediator between the provider and the payer, thus recovering the money on behalf of the former. The act of checking whether the items claimed for compensation are covered under the insurance policy is prior authorization.

The genesis of prior authorization

It all began with the physician’s office appointing clerks to initiate the prior authorization procedure. However the process being too complicated for non-professionals it entailed loss of time and money with accumulation of work leading to back log, delay in revenue generation, diversion of medical attention to commercial reasons and mutual suffering of the provider and the patients, who would often have to cough up money from their personal pockets in spite of having health insurance bonds. Thus started the trend of professional prior authorization services by customized organizations managing the requirements of the same better.

The challenges and solutions

Prior Authorization poses a number of challenges for the practitioners of the same. These challenges are deftly handled by the customized agencies practicing prior auth services either exclusively or as a part of the revenue cycle management package. Examples of some such problems and their solutions are as follows.

• Missing information or key-in-errors
• Increased denial rate
• Increased turnaround time
• Increased time limit due limited staff
• Non-execution of secondary verification
• Continuous follow ups required to know documentation requirements and pre auth status

The solutions to these problems are as follows

• Assignment of required and adequate staff
• Rigorous audit
• Careful completion of secondary verification
• Proper tracking mechanism
• Transaction audit to minimize errors
• Regular collection of documents from the provider’s office

The basic process of prior authorization

Prior authorization initiation: Calling up the insurance company to know their filing procedure, turnaround time, documents required etc. Filing the request along with the collected documents and tracking the receipts for the same.

Authorization follow up: Constantly checking up the prior auth status with the payer company along with submitting the additional documents as asked for by the payer company.

Updation: Updating the final auth status of the request, either of denial or of acceptance, in the providers system along with important service information like start and end date of the procedure etc.

Trivia

• Efforts are on to make Prior Authorization less cumbersome by standardizing the process and making it more automated.
• Electronic Prior Authorization is being considered in form of an online system to receive requests for drug prior auths and process them. Certain states have made e-PA mandatory the number of which is expected to rise rapidly in future making the system even smoother.

William Jones is an experienced prior authorization practitioner who now writes regularly for the internet readers to share his practice experience for the betterment of the industry.