10 Nov Pre-Authorization in Medical Billing Services

Preauthorization, prior authorization, and precertification are terms that can be used interchangeably in medical billing. It denotes the process where the healthcare providers make contact with the insurance companies to obtain a certification number. As a result, that certification number is used to get proper reimbursement for their services rendered.

This stage comes after the patient eligibility and benefits verification in the revenue cycle management process. Pre-authorization in medical billing aids in the proper payment collection for the services delivered to the patients, as most of the claim denials occur when a patient is ineligible for the services he has been offered. 

Pre Authorization in Medical Billing

Pre-authorization in medical billing refers to the process through which the payer agrees to pay for the suggested treatments before they are delivered or carried out. As the term pre-authorization suggests, the anticipated treatment or services must have ‘authorization’ from the insurance provider.

The insurance provider must first approve some planned procedures before the claims can be reimbursed. Typically, the approval is based on the patient’s insurance coverage and the type of plan he has, such as copayment and deductibles. The insurance provider gives a pre-authorization number that should be included on the claim form when the treatment or service is rendered by the medical practitioners.

Why is Pre-Authorization Needed?

Various factors make prior authorization necessary. It is used by all health insurance providers as a measure to keep their costs in check. This process will confirm that the service or medication the doctor is asking for is actually medically essential for the patient. 

Moreover, requiring pre-authorizations will prevent any duplication of the service. This is an area of concern when several healthcare providers are working with a single patient. This also establishes whether a continuing or repeated service is genuinely beneficial to the patient.

Role of Pre-Authorization in Medical Billing

• Verification of Insurance

Pre-authorization is a process that is integrated into the insurance verification process itself, and its role in medical billing insurance verification is crucial to the success of your RCM. As a result, it guarantees that the patient’s insurance information is accurate.

• Confirmation of Reimbursements

Pre-authorization is one method of obtaining an assurance that the insurance company will be required to pay the amount of reimbursement in accordance with the written agreement.

• Reduced Claim Denials

Pre-authorization assists in verifying the insurance information and hence reducing false insurance claims. It also aids in reducing claim denials by requiring the insurance provider to sign a legal document guaranteeing that it cannot refuse the payment.

Challenges of Pre-Authorization 

Pre-authorization depends heavily on accurate diagnosis and the right medical codes. For a quick pre-authorization, accurate coding and documentation of the process prior to the treatment are essential. This is often a difficult process. The function and job of a coder are quite important in this.

There can be times when the pre-authorization process would have been planned but after the patient receives the therapy, other medical procedures can be needed depending on several factors, such as the patient’s health. In light of this, several alternative treatments might be carried out without prior authorization. In these circumstances, there is a high likelihood that the payment will be rejected since the approval was not requested. Therefore, it is preferable to obtain authorization for treatments that would be necessary for a specific patient rather than having a claim rejected for payment due to a lack of authorization.

In an emergency, patient care begins without first receiving pre-authorization. In such cases, healthcare providers must get in touch with insurance companies as soon as possible to request and acquire the necessary authorizations.

Final Thoughts

Every healthcare provider’s success is based on how well the pre-authorization process is managed. It is an integral part of your RCM and other operational activities as it serves as the foundation for the reimbursement of your services.

You may increase your revenue and reduce your claim denials by outsourcing your pre-authorization process. To assist medical practices in increasing their cash flow and streamlining their medical billing procedures, Sypore specializes in RCM to help you save time and get maximum reimbursements through impeccable pre-authorization services. Get in touch with us now to find out how we may assist you.