A Comprehensive Guide to Prior Authorization Process

In today’s medical practice, prior authorization (PA) is a process that needs the proper diagnosis, providing correct medical codes while documenting the required procedure before the treatment. And the PA process often takes too much time away from physicians and can even delay treatment. 

To mitigate the adverse effects of the PA process for patients and doctors, the American Medical Association strongly advocates for healthcare plans. It provides automated and streamlined PA processes through Electronic Health Record (EHR) integration. 

We will know more about prior authorization, its benefits, and how it works. We will also briefly cover how extremely relevant EHR is to today. Moreso, how a virtual medical assistant can alleviate the burden of doctors by handling the PA process.

What is Prior Authorization?

Prior authorization, also called prior approval or precertification, is a health plan cost-control procedure. It is requiring healthcare professionals to get approval from a health plan or insurance payer. This process should be done before performing a specific service on a patient to be eligible for payment coverage.

Many healthcare insurance companies use the PA process. It determines whether a treatment or medication is medically necessary and if the patient’s plan already covers the insurance.

Prior authorization requires a doctor to submit a request to the insurance company for approval. The request must include documentation supporting the necessary treatment or medication. 

The insurance company will review the request and either approve or deny it. If the request is approved, the insurance company will cover the cost of the treatment or medication.

Health insurers use prior authorization to review specific medical services before providing them. It helps to ensure that the service is medically necessary and helps to control healthcare costs. 

In summary, prior authorization is important for an insurance company. This way, it ensures that patients’ services are essential and appropriate for their medical needs.

What is Prior Authorization Management?

Prior authorization management is obtaining approval from a health insurance provider for a specific healthcare service or treatment. It is before administering or giving them to the patients.

The process helps to reduce healthcare costs by eliminating unnecessary tests and procedures. It ensures that the services provided are medically necessary and that the patient’s insurance policy covers them. 

The PA process involves the patient’s provider submitting a request to the insurance company. They authorize the service and provide additional supporting documentation. Once the request is approved, the healthcare professionals can provide the service or treatment.

The History of Prior Authorization: How It All Started

The concept of prior authorization dates back to the early 1960s. It was when the U.S. government began experimenting with cost-containment approaches in the Medicare program. The goal was to contain costs while still providing access to quality care.

In 1965, the first PA program was a way to manage potentially costly or inappropriate services. This program was initially voluntary, but in the late 1970s, it became mandatory for all Medicare providers.

In the late 1980s, private insurers started to adopt prior authorization as a cost-containment strategy. It allowed them to control costs and ensure that their members received the appropriate and most cost-effective care. Since then, prior authorization has gone through various iterations.

Today, public and private insurers use prior authorization to ensure that the services provided are medically necessary and within the parameters of their coverage. It ensures that providers are following established clinical guidelines and that they are not prescribing medications or treatments that are inappropriate or unnecessary.

Overall, prior authorization has been a powerful tool in helping to control costs while still providing access to quality care. Since its initial introduction, it has come a long way and continues to evolve to keep up with the changing healthcare landscape.

Why is Prior Authorization Important in the Healthcare Process?

Proper Healthcare Management of Patient’s Condition

Prior authorization is an essential part of the healthcare process as it ensures the delivery of the right services and the efficient usage of healthcare resources. 

Prior authorization helps adequately manage the patient’s medical condition and apply the best possible appropriate treatment while prioritizing the patient’s safety.

Improve Patient Safety

Prior authorization can ensure that the medical treatments are safe and effective with the lowest risk of side effects. It can help reduce the risk of medication errors, adverse drug reactions, and other medical complications. It can also reduce the risk of over-utilization of services.

Reduce the Risk of Healthcare Fraud

Prior authorization can be vulnerable to fraud. The most common type of fraud is upcoding, when a healthcare provider bills for a more expensive service or procedure than was provided. 

Upcoding includes paying for a complete physical exam even though just a portion of it was performed. There can also be other types of fraud, such as providing services that weren’t previously discussed or offered – or even giving a more expensive medication than was prescribed. 

Healthcare providers must meticulously record their services and ensure that the services they bill are actually provided to guard against fraud through prior authorization.

Provide Cost Control for Doctors, Patients, and Insurance Companies

Prior authorization reduces the risk of overspending on unnecessary services. The insurance provider reviews the doctor’s PA request and determines if the patient’s insurance plan includes coverage of that care. 

Build and Maintain Patient Satisfaction

To achieve patient satisfaction, make the process as simple and efficient as possible by clearly communicating the steps involved and providing them with the necessary documents and information to complete it. 

The PA process can be time-consuming and frustrating for patients because of the waiting and queueing of request approvals from insurance companies before receiving the care they need. 

At times, because of the long wait, the patients may feel frustrated over the lengthy process. Offering additional support and guidance throughout the process and answering questions can significantly help the patients. 

Increase Compliance

Prior authorization helps ensure that healthcare providers and insurers comply with applicable laws, regulations, and guidelines. It can help reduce the risk of legal and financial penalties. It encourages evidence-based standards of care with the streamlined process of electronic prior authorization systems.

What are the Steps of Prior Authorization?

  1. Gather the necessary information and forms, including patient demographics, diagnosis codes, procedural codes, treatment plans, supporting documents, and insurance information.
  2. Contact the insurance provider to determine if the services requested must have prior authorization.
  3. Submit the prior authorization request to the insurance provider and all the required documentation.
  4. Follow up with the insurance provider to check the status of the prior authorization request.
  5. If the request is approved, document the approval information in the patient’s medical record.
  6. If the request is denied, contact the insurance provider to find out why and discuss any possible avenues for appeal.

Repercussions of Prior Authorization for Patients

This process requires patients to obtain approval from their insurance company before receiving specific medical treatments or services. While it helps control costs and ensures that the patient receives safe and effective care, it can have severe repercussions for the patient.

In some cases, prior authorization can delay or even prevent the patient from receiving the necessary treatment. It can cause serious health problems or death if the patient cannot receive treatment on time.

Additionally, obtaining approval from the insurance company can be complex and time-consuming. It can be challenging for those with chronic or life-threatening conditions who cannot wait for the confirmation of their plan. Patients may be required to provide detailed medical information and wait for a response from their insurance company, which can take days or weeks.

The fact that it can take some time to get permission for more expensive treatments is another area where prior authorization has to be improved.

It is especially difficult for individuals who cannot afford such procedures. Insurance companies may be more likely to deny authorization for costly treatments and procedures, leaving the patient to pay out of pocket.

Finally, prior authorization can be complicated and difficult to navigate, resulting in delays or even denials of care. It can be especially challenging for the elderly, who may not understand the process and be unaware of their rights.

How Does Prior Authorization Help?

Having prior authorization in place has several advantages, notwithstanding the consequences listed above.

(1) You receive the most cost-effective care possible. Prior authorization helps ensure that patients receive the most appropriate care, that the plan covers the insurance, and that it is the most cost-effective option available. It can help lower medical costs and ensure that patients are not paying out-of-pocket for unnecessary services.

(2) You receive quality care. Before approving a service, the insurance company will review the request to make sure that it is medically necessary and appropriate for the patient’s health needs.

(3) You receive services that make you safe and well-protected. Prior authorization helps increase patient safety. It helps protect patients from receiving benefits that may harm their health. For the insurance company to prior authorize a service, they will review the request to make sure that it is safe for them to receive.

(4) Only uninsured services require patients to pay out of pocket. When insurers prior authorize the service, it helps to ensure that the insurance plan covers the service and that the patients will not be responsible for paying for it out of their pockets. Prior authorization can also ensure that insurance companies cover the cost of the service.

How Prior Authorization Can Minimize the Administrative Burden

Physicians and institutions can take specific actions to manage prior authorizations to reduce the administrative burden. Since insurance companies often update the prerequisites for PAs based on these standards, healthcare providers should always stay current with the constantly evolving clinical guidelines on every disease state.

When ordering prescribed medications outside the usual course of business, the patient’s plan often requires prior authorization. Lists of the drugs and treatments each plan covers can also be helpful. Adding these lists to the electronic health record notifies doctors when placing an order for something that needs PA.

Knowing and keeping up to date with insurance company policies and formularies can reduce delays in patient care. Assigning and training virtual medical assistants to handle prior authorization requests can be beneficial in reducing the amount of time doctors spend on phone calls with insurance companies.

Having prior authorization-certified patient services specialists as part of the workforce to assist in the administrative process is a huge advantage.

A good documentation policy is also essential, especially when each trial needs step therapy documentation in its prior authorization criteria. Documenting all previous attempts can help speed up the approval process. Long-term retention of previous PA requests also facilitates reauthorization.

Prior authorization is a process used by health insurance companies to determine whether or not a particular medical service, drug, or medical device is covered.

The process requires a healthcare provider to submit an authorization request to the insurance company, including information about the patient, the proposed treatment, diagnosis, and other significant information. 

Once the request is submitted, the insurance company reviews the request and determines whether or not the requested treatment is medically necessary and a covered benefit. 

If the request is approved, the insurance company will provide the healthcare provider with a prior authorization number included on the patient’s claim for the service to be paid for by the insurance company. 

Prior authorization is a necessary process that helps ensure that patients receive the appropriate medical care and that insurance companies are not paying for services that are not medically necessary.

How Important is Virtual Staffing for Prior Authorization

Virtual staffing is becoming increasingly popular in today’s workforce as employers look for ways to increase efficiency and reduce overhead costs. 

Let virtual medical assistants take over the lengthy prior authorization process. They can help ensure that the businesses follow all necessary protocols and legal requirements of the PA process.

A company like Phoenix Virtual Solutions only hires qualified individuals for the job and ensures that hiring only fully trained virtual medical assistants to handle the prior authorization process. 

Additionally, Phoenix Virtual Solutions helps ensure that the remote staff has experienced proper training and supervision, minimizing any potential risks associated with the remote staffing arrangement.

Final Thoughts
Prior authorization is a crucial tool healthcare providers, and insurers use to ensure that treatments and medications prescribed are medically necessary, safe, and cost-effective. If the PA procedure is not carefully followed, patients may encounter delays, denials, and confusion.

Patients need to understand the PA process. It is easy and efficient to handle with the right resources and personnel to support the process. And a well-trained virtual medical assistant can help not only the doctors but the patients as well. 

Phoenix Virtual Solutions’ Prior Authorization Specialists will make your prior authorization process and administrative tasks seamless, primarily when documenting and maintaining records. In return, you can focus more on your patients, not on paperwork. Schedule a free consultation today!

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