Prior Authorization, The Initial Step To Holistic Revenue Cycle Management

Explains the nature of pre-approval, the initial verification process between the patient, provider and payer that initiates the medical revenue cycle management process in the medical industry around the world.

What is pre-approval?

It is the foundation of Medical Revenue Cycle Management, which determines a smooth flow of cash in exchange for medical services, ensuring sound medical practice, non-piling unpaid bills, and a healthy relationship between patients, providers, and payers. In short, this means that the patient’s insurance profile is authenticated to ensure that the medical service they have opted for is properly covered by the particular insurance company they are registered with. In most cases, in the absence of pre-approval, medical revenue is denied, leading to a pile-up of denied claims, a pandemonium of denial management, and industrial bitterness.
However, it is much more than reviewing insurance policies. This also includes checking the co-payment obligation, whether the patient is also insured, the amount, etc. The entire process of pre-approval should make medical billing cost-effective, secure and time-saving.
The various reasons that have required prior approval are age, medical regulations, the need for medical alternatives, and drug specifications. Failure to comply with approval will result in denial of benefit or the patient will undergo an initial procedure where they must demonstrate clinically that a particular treatment (preferred by the insurance company) is not applicable to them before the payer agrees to pay for the alternative medication.

What is the process followed for pre-authorization?

Prior authorization begins upon receipt by practice administration of a request from a provider. After that, the whole authentication process begins, which includes filling out and submitting a pre-authorization form. The protocol followed will vary based on practice manager and payer rules. If a particular medical procedure is rejected by a payer, the practice management can appeal on behalf of the provider. In other cases, additional information is requested from the payer to the provider.

What is the purpose and cost of the procedure?

The original purpose of pre-approval was to prevent prescription drugs and treatments that are expensive, irrelevant and risky. It should also make medical treatment less expensive and less complicated. However, the technical knowledge and insurance awareness required to successfully execute pre-approval plans cannot be readily acquired by the physicians and office staff of healthcare providers. This wastes time and money. To realize the real benefits of pre-authorization, providers must enlist the help of bespoke practice managers who specialize in revenue management protocols, including pre-authorization.

How to overcome pre-approval challenges?

The biggest challenge in the pre-authorization process is the volume of work involved. Refusals to pay and vendors disputing claims often outnumber them, leading to time pressures and conflicts. Electronic power of attorney is an effective solution to the problem, but there is still time to fully implement it.

Streamlining the pre-authorization process is another way to eliminate the hassle of fulfilling a successful authorization. The best results can be achieved by combining manual and mechanical methods. Some of the technical tips for improved pre-authorization are be up-to-date on essential patient, provider and procedure information

  • Validation of the pre-authorization request based on solid communication with the payer
  • Verification of patient suitability
  • Carry out the authorization process based on the payer’s protocol
  • Periodic review of authorization status
  • Storage of the authorization profile with relevant information from the doctor or the provider. Provision of additional information
  • Regular update with the entire billing system

Smooth prior approval will not only improve medical revenue recovery, but also create good trust and healthy atmosphere in medical industry. The medical service is a emergency service that needs to be supported by a solid revenue management cycle.

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