- September 10, 2024
- Posted by: David Smith
- Categories: Pre Authorization, Prior Authorization
Imagine a situation. It’s 2 o’ clock in the morning, and a patient is rushed into the emergency room. Your paramedic drops off an EKG, saying, “We need to rule out a STEMI immediately.” The team quickly assesses the patient, pages the on-call cardiologist, and preps the cath lab. But just as the patient is about to be moved to the lab, an administrator stops the process – they haven’t received prior authorization from the insurance. The resident heads to the phone, waits on hold for 30 minutes, then spends another 20 explaining the patient’s condition. After finally getting the authorization number, they hand it over, and the procedure can begin. But an hour has already been lost.
This scene might sound absurd, but in psychiatry, it’s the everyday reality for the sickest patients in the emergency room.
In US, each year almost one in five adults and one in six children face mental illness. The majority of these patients suffer from severe symptoms and they often require psychiatric hospitalization, which becomes a lifesaving intervention.
Patients needing admission to a psychiatric hospital are usually either struggling with severe suicidal or violent thoughts, or are unable to care for themselves due to a mental health condition. Hospitalization offers a safe space where they receive care, which can include medication adjustments, group and individual therapy, and sometimes more intensive treatments like electroconvulsive therapy.
In the US, people under 45 often require hospitalization because of mood disorders apart from pregnancy and childbirth.
Pre-authorization solutions for inpatient care:
To cover inpatient psychiatric hospitalization, almost every insurance company requires physicians to obtain prior authorization approvals.
The whole process of obtaining prior authorization often adds up more days in the emergency room stays for patients.
The overall PA process makes the patients stays for extended time in an adverse environment, thus putting both the patient and staff safety at risk.
It also takes away resources from other patients with urgent medical needs. Patients awaiting surgery or treatment for non-psychiatric conditions don’t face this hurdle, reinforcing the stigma that psychiatric emergencies aren’t as urgent as physical ones, like a severe infection.
Parity law considerations:
Federal laws like the Mental Health Parity Act of 1996 and the Mental Health Parity and Addiction Equity Act were created to ensure psychiatric care is treated equally to medical or surgical care. These laws prevent health plans from setting different limits, costs, or coverage rules for mental health care. The 2010 Affordable Care Act took this further by requiring coverage for mental health and substance use treatment, ensuring it’s comparable to medical and surgical care.
Despite these laws, insurance companies have still made it harder for psychiatric patients to get the same affordable and accessible care as medical or surgical patients. This raises questions about whether requiring prior authorization for psychiatric hospitalizations violates these laws. Under the MHPAEA and ACA, health plans aren’t allowed to apply stricter limits to mental health benefits compared to medical or surgical care. However, while prior authorization is often needed for psychiatric admissions, it’s usually not required for medical or surgical admissions, suggesting unequal treatment.
The reason behind this:
Have you ever wondered to know the reason why does inpatient psychiatric care go through more administrative challenges than other urgent medical care, especially when the violation of parity law is concerned?
Insurance companies question the requirement of inpatient hospitalization. Yet, studies show that almost all prior authorizations for psychiatric admissions get approved. This suggests they may be more about discouraging costly care than truly questioning its necessity. With each authorization taking an average of one to 4.5 hours, it adds up to an estimated one million hours of clinician time wasted annually in the U.S. This delays care for psychiatric patients and takes attention away from other patients, raising the question: is this really the best use of a There were once concerns that mental health parity would raise overall healthcare costs, but these ideas have largely been disproven. As Barry et al. explain, opposing parity due to higher costs is no longer a valid argument. However, they also mention that managed care tactics, like requiring prior authorization, may still be used by insurers to deter people with mental illnesses from enrolling. Insurance companies may resist dropping the prior authorization requirement because inpatient stays involve higher upfront costs. To make this change sustainable, insurers would need to adjust premiums and attract the right subscriber base.
Getting rid of prior authorizations could actually save insurance companies money by cutting down on the need for around-the-clock administrative staff. By removing this barrier, patients could get faster, higher-quality care, which might lead to shorter hospital stays and fewer hospitalizations overall. Plus, with clinicians able to focus more on their core duties, efficiency in the emergency room and across the healthcare system would improve.
Read More
How Does Prior Authorization Impact Patient Health Outcomes?
Prior Authorization is carried out for processes like providing a costly drug, determining the medical necessity, or providing durable medical equipment (DME) to analyze the need for the same.
What measure of prior authorization services is being taken?
State investigations and legal cases against insurance companies for not following parity laws are becoming more common, though they usually focus on outpatient and residential services rather than acute inpatient care. For example, Massachusetts recently investigated behavioral health parity and found issues. As a result, five major insurance companies had to improve their practices, including removing prior authorization requirements for inpatient care in some cases.
Manual prior authorization is time-consuming and complex, taking your focus away from patient care. Traditional methods are often slow and lack transparency, which can hurt patient engagement and lead to serious issues.
Choosing the right prior authorization company can be confusing. That’s why we, at Sunknowledge, can guide you in finding the best pre-authorization solutions tailored to your needs!
As the leading pre-authorization company, we understand the latest guidelines for pre-authorization in medical billing and can help fix any practice management issues you might have. Our team of specialists handles:
- Starting prior authorization requests
- Collecting documents from physician offices
- Coordinating with both payer and provider offices
- Following up on authorization status
- Checking for additional document needs
- Updating the authorization status in your billing system
If managing prior authorizations in-house is a challenge, our pre-authorization experts can help smoothen the issues in your revenue cycle. We also excel at handling outsourced prior authorization services across various specialties. If you want to know more about our prior authorization services, schedule a non-obligatory call with one of our experts today!