An Exclusive Guidebook in Specialty Pharmacy Billing

Specialty pharmacy drugs that require prior authorization are usually the costly drugs that you often prescribe for treating complex, chronic or rare medical conditions. As you already know the fact that these drugs are expensive and often come with potential side effects, insurance companies and pharmacy benefits managers (PMBs) require you to obtain prior authorization approvals before administrating them to the patients.

But before we dig deeper into the details about the prior authorization process for specialty pharmacy, it is important to know what prior authorization is, its importance and the associated challenges of prior authorization.

What are prior authorization services in specialty pharmacy billing? 

Prior authorization is a critical component of your specialty billing cycle. It is a process where you need to receive prior authorization approval before administrating some specific specialty pharmacy medications to your patients. Prior authorization services are also known as pre-authorization services. It is important to check which drugs require prior authorization during a patient’s insurance eligibility verification process. The prior authorization approval completely depends on the patient’s insurance company’s prior authorization guidelines. Based on the terms of benefits and the specialty pharmacy drug requirements, the patient’s insurance company approves or rejects the PA request. You will receive an authorization number from the insurance company and you will have to quote it in the final claim form that you should submit after the treatment.

The importance of prior authorization in revenue cycle management process 

Pre-authorization experts in the specialty pharmacy billing process are always proficient enough to ensure seamless claim of bills. However, a prior authorization approval does not confirm that your final claim will be approved. A claim can still be denied for other reasons, such as insufficient documentation, inaccurate coding, or discrepancies in the patient’s insurance coverage. For example, a patient prescribed with Humira (adalimumab) for rheumatoid arthritis might receive prior authorization for the drug, but the claim could later be denied if the necessary medical records have not been submitted correctly or if there was an error in coding the diagnosis and treatment plan.

To ensure a seamless prior authorization process, it is important to know the critical challenges experienced by specialty pharmacists and other healthcare providers.

Critical prior authorization challenges 

• Proper diagnosis and assigning the accurate specialty pharmacy codes play critical roles in the whole prior authorization process. You must document the required procedure before prescribing the specialty drugs to receive timely authorization number from a patient’s insurance company. Specialty pharmacy billing mechanism involves a huge number of complex codes, thus making the documentation job really challenging for an amateur in-house back-end team.

• Every insurance company has its own set of rules and regulations regarding prior authorization. Furthermore, insurance companies are constantly increasing the number of drugs that require PA, thus making the process more complex and time-consuming for you. As a specialty pharmacist, your primary objective is to ensure the best clinical-care. Unfortunately, prior authorization eats up a significant amount of time and effort from clinical care.

• Sometimes, a procedure is planned in advance, and prior authorization is approved. However, when the patient receives treatment, their health condition might require different specialty drugs that weren’t originally planned. These new drugs may be done without prior authorization, leading to potential issues. In such situations, the chances of PA denials are higher as PA approval is still missing. To avoid such a situation, you should always obtain prior authorization for the newly administrated drugs also. Remember, there is no harm when a drug has been authorized but not administered.

• In case of emergency, patient treatment-course initiates before securing PA approval. These situations often occur when a patient experiences illness during weekends, especially at nights. In these situations, you should contact a patient’s insurance company as early as possible and obtain the required prior authorization approval.

• When you fail to receive the required PA approval and encounter payment denial, you need to take a firm decision whether to bear the cost of prescribed drugs yourself or collect that from the patient. You can know whether the prescribed drugs are covered or not by a patient’s insurance plan during the insurance eligibility verification process. If the medications are not covered by the patient’s insurance plan, they are responsible for making the payment out-of-pocket. However, when a claim is denied due to PA failure from your end, you are responsible for absorbing the costs. It causes a financial loss for your practice.

Fortunately, you still can improve your pre-authorization solutions by implementing some effective strategies.

Critical strategies to improve pre-authorization solutions 

Assign dedicated staff members: 

Successful implementation of a robust PA management requires adequate knowledge and experience of professional pre-authorization experts. Assign staff members who are specifically experienced in prior authorization process in specialty pharmacy billing eco-system.

Maintain a master list of prior authorization: 

Each team should have a main list of procedures and medications that need authorization. This list should be updated regularly. The staff responsible for staying informed on payer rules should also keep the prior authorization list up to date.

Encourage thorough documentation: 

Inadequate clinical documentation is one of the vital reasons behind prior authorization failure. Make sure each staff is documenting patients’ critical data. This information plays a vital role at the time of submitting the PA request to a patient’s insurance company.

Focus on timely follow up: 

Staff should track every prior authorization and follow up regularly to make sure the payor has all the necessary information. Sometimes, things can get missed by payors. So it’s up to the billing staff to catch these mistakes.

Appeal denials properly: 

When appealing an improperly drafted denied PA, take enough time to write a well-organized case. Make sure that you are including all the supporting documentation and clinical information to avoid any further rejection.

Outsource prior authorization services: 

Outsourcing PA to a professional third-party pre-authorization company is one of the most effective ways to improve your overall revenue cycle. Pre-authorization experts in professional RCM companies know what it takes to ensure the best PA management process for your specialty pharmacy practice.

If you are searching for one of the best pre-authorization solutions, look no further than Sunknowledge. Our team is excited to show you what makes us stand out in the prior authorization process. We have a group of expert pre-certification and pre-authorization specialists who can support you during challenging times of employee shortages.

We understand your concerns about collections better than anyone and can help you work more smoothly with your payors. Our team handles everything—from starting PA requests and checking eligibility to contacting physicians, gathering documents, speaking with payors about authorization outcomes, and updating the client’s billing system. To know more about our PA solutions and other billing services, schedule a non-obligatory call with us.