Prior Authorization Denials – Reasons and Ways to Stay Clear of It

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Nov 17, 2022

Prior Authorization Denials – Reasons and Ways to Stay Clear of It

Prior authorization issues were regarded as one of the top reasons for claim denials and reimbursement delays. An AHA report has stated that 89% of medical practices have seen an uptick in claim denial rates over the last three years, with 51% saying that the increase has been significant. About 80% of the claims denied are either due to the fact that no prior authorization has been obtained or submitting incorrect prior authorization requests. Even though providers are taking significant measures to address prior authorization claim denials, carriers continue to increase the number of medical procedures and prescription medications that require prior authorization, leading to an uptick in claim denials.

Let us now explore some of the reasons for prior authorization claim denials due to predetermination issues

  1. Payer rules and policies are complex and keep changing. An unexpected change in payer policy can result in a denial. This mostly falls under the category of “soft denial”, and is regarded as a minor issue. It could be fixed by resubmitting the claim in accordance with the payer’s updated rules and regulations.
  2. Each carrier has their own set of rules and guidelines for processing prior authorization requests. If the insurance carrier is new to the medical practice and the healthcare provider is not familiar with their new rules it is obvious that it will invariably lead to prior authorization denials. Here again resubmitting the request is the solution.
  3. Preauthorization process is driven by rules and regulations that constantly keep changing. Failure to keep up with the changes and additions to payer plan prior authorization rules can result in potential claim denials. Staying up-to-date with major insurance providers’ policies and guidelines can prevent these denials.
  4. Lack of skilled resources to handle prior authorization requests is yet another reason for PA claim denials. Prior authorization is a lengthy and laborious process and requires highly skilled specialists to carry out the paperwork, submit the request form along with the supporting documents, and ensure consistent follow-ups

Best practices to be followed for preventing prior authorization claim denials

  1. Eligibility and benefits verification: Ineffective insurance eligibility verification and/or prior authorization process can cause claim rejections. Hence, focusing on an efficient insurance eligibility verification process can help reduce prior-authorization related claim denials. Ensuring to verify what services require prior authorization should be a part of your eligibility process.
  2. Ensure accurate coding: Do take the time to double check and ensure that the prior authorization request is free of any incorrect procedural codes that might trigger a denial. Take for example a provider recommends a biopsy to examine a tissue for disease. This biopsy does not require a pre-approval but an excision of a lesion requires one and if the provider proceeds to carry on the excision without obtaining a prior approval, the claim will be denied. Hence, to be on the safer side it is better to pre-authorize all procedures. Even if the procedure is not completed there is no penalty.
  3. Check in advance if proposed services/ drugs require PA: Check prior authorizations before providing the services or sending out the prescription to the pharmacy to be processed. This is a crucial step in preventing claim denials that may arise due to unmet prior authorization requirements.
  4. Stay current with payer rules and requirements: Rules and regulations vary from payer to payer. The national payers have a different set of rules for reimbursements when compared to the state/regional and local payers. Having a thorough knowledge of different payer rules ensures meeting all payer requirements in submitting prior authorization requests. This clears the deck for smooth settlement of claims.
  5. Follow a streamlined approach: The medical billing and revenue cycle process is a complex maze that calls for a strategic and streamlined approach to handle with utmost diligence to ensure that they don’t miss out on any crucial step. A systematic approach paves the way for progressive results, thus preventing loopholes and unintended consequences.
  6. Incorporate technology: Leveraging artificial intelligence can help practices automate tasks to improve outcomes and significantly reduce claim denials. The power of intelligent automation provides the tools to streamline the prior authorization and insurance and eligibility verification process.
  7. Effective denial management: Claim denials happen. You have to face it. At the end of the day insurance carrier’s goal is to save money by either paying out nothing or very little as possible on the claim. And as said earlier insurance carriers keep adding procedures or medications that require prior approval, paving the way for denials. So, if a claim is denied appeal the decision in accordance with the carrier’s guidelines.
  8. Best clinical practice guidelines: Complete and thorough documentation based on clinical practice guidelines is the perfect way to get a prior authorization approval or to appeal a denial. Make it a point to document anything that deviates from evidence-based clinical practice guidelines. Take for example the provider intends to perform a sigmoidoscopy on a 45 year old patient, it is crucial to mention that there is a prevalence of first-degree relative at age 40 with colorectal cancer in the pre-authorization request.

Prior authorization is a time consuming and tedious process that can lead to denial of claims. That is why it is a good idea to outsource this crucial task to experts in the field. Scribe4Me has a team of PA specialists who can handle all paperwork and quickly obtain prior authorization approvals from insurance carriers. Sounds interesting? Well, taking the help of a professional medical billing company can go a long way in reducing denials, maximizing reimbursements and most importantly improving patient care and satisfaction. To learn more email us at [email protected]

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