The Discussion Continues: Is Prior Authorization Criterion Doing More Harm than Good?

COVID-19 pandemic has changed healthcare industry’s dynamics. The impact might be temporary in some aspects while it can also lead to permanent changes in some situations.

Many changes were suggested to cater the overflowing COVID-19 positive cases. CMS even recommended delaying the nonessential medical procedures to curb down the virus exposure. This certainly was a brave decision as it protected the health of physicians, patients, and medical billing services workers but drag down their financial situation as well.

The prior authorization rule is also under fire for the same reason. Many insurance companies and Medicare payment models are waiving off the prior authorization restriction for diagnostic or surgical procedures for coronavirus.

However, there are many others, which require the pre-authorization segment filled in the claims. Even when the physicians obtain prior authorization, the claim might end up being denied.

Why Prior Authorization is Necessary?

Prior authorization is particularly required for expensive or new medical procedures. If insurance companies don’t pay up for the rendered services or don't prior authorize for the service, medical billing companies will be compelled to ask from the patients, which ultimately will lead to the complicated and frustrating revenue-generating process.

Getting Authorizations Needs Investment

Getting authorizations is not that simple as one thinks. Physicians have to bear extra costs for that.

Healthcare costs are already getting out of hand as physicians have to maintain quality healthcare. In these drastic times, when reimbursements and payment models are failing to compensate physicians’ revenue problems, prior authorization is a clause that needs relaxation.

Why Prior Authorization is a Problem, Especially Now?

The prior authorization criteria from the insurance companies give more power to insurers rather than physicians and patients. Although, it is physicians, who are spending dimes for the authorization process; and with denial of the claim, the return payment becomes zero.

On average, medical billing companies spend at least twenty-seven minutes and almost eleven dollars on each authorization action. Every time, having to consult insurers, physicians get the idea that a third party is dictating the healthcare service. 

Moreover, with more medical procedures requiring prior authorization, the more burden physicians will have to bear.

It is not to be blamed upon insurance companies for such strict rules. It is the US healthcare industry whose complex structure is weighing down all stakeholders, be it, patients, medical practitioners, medical billing services, and insurers.

Coronavirus has adverse effects on the healthcare industry. But it certainly is reveling the problematic areas.

The Counter Action

Some insurance companies are resolving this issue themselves by suspending referrals and prior authorization conditions and requesting notification within a day of any inpatient and outpatient medical service. There are, however, some exclusive cases such as, for transplant and genetic cases.

This service applies to all areas of physicians, even if they don’t belong to a network. It will not only reduce administrative burden over medical billing and coding services but also free up resources, which are consumed up during the delayed billing services.

Some states are working to empower patients and physicians, but the problem is that each state is working on its own, without any collective effort. Therefore, the confusion arises about the after-effects or long terms prerequisites of the COVID -19 counter-strategy.

The authorities say that it is in the best interest of the healthcare industry to continue the practice of prior authorization to avoid surprise medical bills. Popular opinion is that authorities might not know how surprise bills will be unfolded in the future.

The uncertainty and ambiguity disguised in temporary and permanent changes might find solace in technology incorporation.

Prior authorization generally consists of three steps:

•        ICD-10 codes incorporation
•        Automated data submission
•       Retrieval data process

With technology, these steps can be a lot smoother than before. The per authorization cost will be reduced, and of course, time consumption will also be minimum.

Even if the changes prolong, physicians and medical billing companies can enjoy a relaxed working environment. Prior authorization is surely an administrative burden but it encompasses lots of financial benefits. Healthcare professionals need to understand the requirement and adopt methods to make it a primary billing function.

There are opportunities to improve the system, and this time, we may be able to realize what’s best for all stakeholders.