How to Avoid Lost Revenue for No Prior Authorization

Nurse putting identification bracelet on patient in hospital

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Denied claims due to unauthorized patient procedures or services can be a major loss in revenue that should not be taken lightly. Although most medical offices are moving closer to 100 percent verification for patient services, there is still no guarantee that every account will make it through the insurance company claims department stamped paid.

Who Is Responsible for Obtaining Prior Authorization?

Claims that are denied due to no prior authorization happen primarily in a hospital setting. Although the procedure may take place in the hospital, the responsibility lies with the physician's office to obtain the prior authorization.

Of course, it makes sense for the physician to be responsible for obtaining authorization because they are ordering the procedure as part of the treatment for their patient. The physician has the patient's medical history and all information that the insurance company wants to make their determination. However, the medical office is ultimately responsible to ensure that the authorization is obtained because the hospital will lose revenue, not the physician.

Steps for Ensuring Prior Authorization Is Obtained

It only takes a little extra effort on the part of the medical office to guarantee that the necessary steps have been taken to avoid lost revenue for no prior authorization. Follow these simple steps.

  1. As soon as the patient has been scheduled for a procedure, the insurance verification process should begin.
  2. If the insurance company requires authorization for the procedure, contact the physician's office immediately to find out if authorization has been obtained.
  3. If the physician's office has obtained authorization, get the authorization number from them. If they don't have it, contact the appropriate department at the insurance company to get the authorization number. It is also a good idea to make sure the information they have matches your records.
  4. If the physician's office has not obtained authorization, politely inform them that they must get it before their patient can have their procedure. Usually, physicians are very compliant with this request. They want their patients to have the best care and would not do anything to jeopardize them from being able to have a procedure performed.
  5. Always follow-up with the insurance company. If possible, request a fax of the approved authorization for your records. You may need it later.
  6. If a procedure changes or something is added at the last minute, contact the insurance company as soon as possible to add the changes to the authorization. Some insurance companies allow as little as 24-hour notice for approval on changes.

Check and Check Again

The basic idea here is to check, and then check again, and when you're done checking, check one last time. Never assume that the physician's office has obtained an authorization. Also, never assume that prior authorization isn't required. Each insurance company, including Medicare and Medicaid, have their own guidelines and what is not required for one may be required for another. Make sure you and your patients are covered.

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