Is Prior Authorization Criterion Doing More Harm Medical Billing Services

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 Mips Reporting.

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. General Surgery Billing Services

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.

Prior authorization (PA) is a cost-containment strategy used by insurance companies to ensure that certain medical procedures, medications, or services are deemed necessary before they can be approved for coverage. While the intention behind prior authorization is to curb unnecessary healthcare costs, its implementation has sparked considerable debate. Many argue that it can lead to delays in care, increased administrative burdens, and even worse health outcomes for patients. In this article, we’ll delve into the impact of prior authorization on medical billing services and the broader healthcare landscape. Neurology Billing Services

Understanding Prior Authorization

Prior authorization requires healthcare providers to obtain approval from an insurance company before providing specific treatments. This process often involves submitting detailed information regarding the patient’s condition, the proposed treatment, and the rationale for its necessity.

The Burden on Healthcare Providers

1. Administrative Challenges
   Medical billing services face significant hurdles due to the complexity of prior authorization. The paperwork and documentation required can be time-consuming, leading to increased administrative costs. Staff must often spend hours on the phone with insurance companies, navigating complex guidelines to secure approvals.

2. Delays in Care
   One of the most pressing issues with prior authorization is the delay it creates in patient care. Patients may experience longer wait times for necessary treatments, which can exacerbate their medical conditions. For instance, if a patient requires a specific medication to manage a chronic illness, delays in authorization could lead to severe health complications.

Impact on Patient Health Outcomes

1. Increased Health Risks
   When patients experience delays due to prior authorization, their health may decline. This is particularly concerning in urgent care situations where timely intervention is crucial. Studies have shown that patients who face delays in necessary treatments often experience poorer health outcomes and higher rates of hospitalization.

2. Frustration and Confusion
   The prior authorization process can be a source of frustration for patients. They may be unaware of the requirements, leading to confusion and anxiety regarding their care. This lack of transparency can erode trust in healthcare providers and the insurance system.

Financial Implications

1. Increased Costs
   The administrative burden of prior authorization doesn’t just affect healthcare providers; it can also lead to increased costs for patients. When treatments are delayed, patients may require more intensive (and expensive) care later on. This cycle can inflate overall healthcare costs, negating the intended savings of prior authorization.

2. Insurance Rejections
   If a prior authorization request is denied, patients may find themselves liable for the full cost of care. This can lead to financial strain and may deter individuals from seeking necessary treatments altogether.

Alternatives to Prior Authorization

1. Value-Based Care
   Shifting toward value-based care models could alleviate some of the issues associated with prior authorization. By focusing on patient outcomes rather than procedural approvals, healthcare providers may be better equipped to deliver timely care without excessive administrative burdens.

2. Streamlined Processes
   Implementing more efficient prior authorization processes, such as automated systems, could reduce delays and administrative workloads. By harnessing technology, medical billing services can expedite approvals and enhance communication between providers and insurers.

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.

Read More: QPP MIPS 2020 Reporting Guidelines for Chiropractors Reporting Services

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.