Everything You Wanted To Know About Prior Authorization (But Were Afraid to Ask)

An introduction to Prior Authorization

Patient buys health insurance.
Patient gets a medical service.
The insurance pays for it.

Sounds simple enough, right? Well, there’s just one small problem. And it’s called prior authorization.

You may have heard about it or if you are a provider, you may have had to deal with it many a time. So what is prior authorization?

To attempt a simple definition, it’s a requirement posed by health plans where a provider needs to obtain a formal confirmation that the service that has been prescribed to a patient will be eventually covered under the patient’s plan. The reason for it is to keep healthcare cost under control and also to ensure patient safety. So, typically speaking, if a particular medication has been prescribed to a patient by a provider, the insurance company would like to know why a cheaper, generic version of the same drug will not work as well. Similarly, if a medication is known to have dangerous side-effects, the insurance company would like to know why the doctor thinks that it should be prescribed.

Getting it all right

Prior Authorization (which is also referred to as ‘preauthorization’ or ‘pre-certification’ sometimes), therefore, boils down to establishing the medical necessity and safety-of-use of a prescribed medication or procedure or a therapeutic device (like Durable Medical Equipment or DME). So whenever the need to obtain prior authorization surfaces, the request should accompany all supporting proofs that help to establish these aspects.

Well, that’s the whole story, more or less. However, getting a prescription preauthorized, in reality, can be a painfully tedious affair. There is a substantial amount of paperwork to de done, there are long wait times involved, and the ever looming risk of getting your prior auth request rejected due to the smallest slip or omission is always there. Yes, it can get a little maddening at times.

In fact, one of the biggest complaints about the process is the amount of time and effort that it demands. It can keep your billing desk personnel busy for hours, lead to an increase in operational expenses and leave less time for you to devote to actual patient care.

Coming to terms with Prior Authorization

One of the best ways to ensure a smooth and uneventful prior authorization experience is to ensure that the PA request is submitted according to the plan’s guidelines. One should double-check that all requirements are met perfectly before a request is submitted. And since the doctor’s office is responsible for submitting prior auth requests, it will be important for the patient to work closely with the doctor, or the staff member in the doctor’s office designated to handle PAs, to ensure that they have all the necessary information.

A recent trend has been to outsource all PA tasks to specialized, third-party billing organizations. It saves providers not just all the usual hassles associated with pursuing prior auth requests, but also thousands of dollars in operational cost. Outsourcing means that there will not be any need to recruit and maintain in-house staff or pay for the overhead. Providers are required to pay only for actual hours of work done on their accounts. This is an excellent option if you are looking to streamline your prior auth process, increase your collections and find more time for yourself to spend on other important aspects of your practice.