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Everything that could go wrong with prior authorizations

Medical Billing

Disclaimer: This blog article was written by an AdvancedMD partner. The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of AdvancedMD.

Healthcare prior authorizations, or preauthorizations, are a must-have for all medical organizations and practices. They require physicians to obtain proper approval from an insurer for any given treatment or medication prescribed. However, even after processing the prior authorization properly, things could go wrong for many reasons.

Prescription drugs that necessitate preauthorizations and the criteria for approval:

  • Medications that have serious side effects.
  • Medications that are unsafe when taken with certain other drugs.
  • Medications that are not appropriate for the patient’s age.
  • Medications in heavy doses (more than normal level).
  • Cosmetic medications (e.g.: pills for hair growth).
  • Expensive medications for severe illnesses.
  • Drugs for conditions that are not life threatening.
  • Medications that have a generic form available at a less price.
  • Drugs that are not covered by the payer, but there is a medical necessity per the provider.

Healthcare prior authorization is necessary for several factors, in addition to the fact that it lowers the cost of care. Nevertheless, the practice itself requires a lot of effort and this also increases administrative burden, increased waiting time for management, and endless documentation.

Why do prior authorization requests get denied?

Prescriptions are sent to pharmacies with incomplete preauthorizations more than 50% of the time causing some patients to miss out on their prescribed medications. Patients who are unable to obtain their prescriptions typically discontinue the whole course of therapy, or become increasingly worried about their health.

Let’s look at various issues that practitioners encounter while processing preauthorizations:

1. Too time consuming for providers

Medical professionals, including doctors, have regularly voiced their frustration with having to manage prior authorization services while still attending to patients’ basic needs. When the pharmacy contacts the practice, the staff and doctors must move quickly with the verification and communication process to inform them of the prior authorization requirements to complete the steps correctly.

Not only that, they also need to follow up frequently after submitting a PA application requiring them to complete the applications completely and accurately.  Additionally, practices are becoming more and more burdened by prior authorization services and are actively seeking alternatives.

2. High costs of the prior authorization process

Per Health Affairs, a study found that if the time practices spend in dealing with payers is converted to money, that practices typically expend an average of $68,274 per practitioner per year—that converts to a national average of approximately $23 to $31 billion annually!

According to reports, doctors from all over the U.S. claim that contacting and pursuing health insurers and completing the healthcare prior authorization services takes a lot of time. Therefore, when calculating the overall expenses incurred at the completion of the fiscal year, the health sector is overly expensive.

3. Delay in patient care

Patients might choose to switch doctors or discontinue the entire course of therapy if their treatment or medication is delayed. They will be subjected to distress as a consequence of their inability to manage their health. According to several health care professionals, healthcare prior authorization, “harms patient access to medical care, harms medical results, and poses many dangers to patients’ health.”

4. Management of prior authorization services

Due to the variance in regulations from one insurance carrier to another, management of prior authorization services can be difficult for practices. Additionally, different payers have varied requirements for submitting PA requests. Therefore, practices don’t use a consistent procedure for all payers, and this results in employing more resources within a short amount of time.

There are numerous reasons why claims for the preauthorization process are delayed, including:

  • Insufficient and missing PA procedure on the part of the pharmacist and doctor
  • Incorrect/ incomplete/missing data in the documents (e.g. patient demographics such as DOB)
  • Inadequate pharmacy billing data
  • Out-of-date or incorrect insurance details
  • Submitting PA to the incorrect payer
  • PA authorized by the insurance but not notifying the pharmacy or clinic.
  • Clinicians not complying with the payer’s requirements; outdated authorization; (very common)

As you can see, when practices are directly involved in the prior authorization process without experienced staff, they are prone to face numerous challenges.  However, if a proficient third party vendor is involved, practices and providers can transfer the burden of prior authorization process.  Select a partner who really can handle all the aspects of your healthcare prior authorization services on their own, from the time they learn about it from the pharmacy till they get paid.

About Us

A number of practices across the nation are receiving assistance from Practolytics to handle their Prior-Authorization services entirely securely and effectively. In order to provide our customers with superior RCM processes, we teamed with AdvancedMD in 2013. Utilizing our in-depth understanding of the healthcare industry, we process about 2 million claims yearly.

Medical coding, billing, denial handling, credentialing, and eligibility verification are further areas of our competence. We lend you our knowledgeable hands so you may establish a profitable practice with excellent patient care.

Practolytics logo
Practolytics partnered with AdvancedMD in 2013 to create a one-stop solution for all the medical billing, practice management, patient management, and revenue cycle management activities a healthcare practice need to carry out. A Platinum partner amongst 850+ billing companies, Practolytics is a 20+ year-old healthcare technology and revenue cycle management services company providing medical billing service solutions to 180+ practices of all sizes spreading across 31 states and serving more than 28 critical specialties. Practolytics with support from AdvancedMD billing software processes more than 2.5M claims annually, collecting more than $500M for its clients. End-to-end services include medical billing, medical coding, chart audit, credentialing, eligibility, benefits verification, and preauthorization services. The company’s diverse background in every aspect of healthcare allows it to maximize revenue and consistently deliver optimum results.

Topic: Medical Billing, Patient Experience

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