If you contract with third-party payers, then you’re most likely already familiar with the term [cue ominous thunder sounds] “prior authorization (a.k.a. preauthorization)”. And if you’re not yet, just wait. This Verywell article—written for patients—explains that when an insurance company requires prior authorization, healthcare providers must obtain approval from said insurance company before providing patient services, treatment, or equipment. Otherwise, the insurance company won’t pay for it—and either the provider or the patient will be left with the bill. While this sounds fairly straightforward, in practice, the prior authorization process for providers can be anything but.
Room for Error
According to this Physicians Practice resource (which is obviously directed at physicians, but is still relevant to PTs), “Physicians and practice staff spend 14.6 hours securing 29.1 prior authorizations per physician each week. Over the course of a year, that can add up to as much as $85,000 spent to support a full-time physician.” And not all of that time is productive: “a nurse [or front-office staff member, for that matter] could spend 45 minutes on hold with a payer only to learn that a prior authorization is not needed for the service being ordered.”
That all makes sense given the fact that most insurance plans have their own specific requirements for prior authorization with very little overlap—and the onus to understand those requirements falls squarely in the practice’s lap. The above-cited resource noted a McKesson study that reviewed 23 health plans and “counted 1,300 procedure-specific authorization policies, with only 8 percent of those policies shared in common.” In other words, there’s a lot of room for error when determining which plan requires what and when—and that room for error can also impact patient care: “In a survey of physicians, 92 percent reported care delays due to the challenges of securing prior authorizations. And the impact of delayed care can be dangerous: 78 percent of those surveyed reported that delayed authorizations can lead patients to abandon treatment.”
Now for some good news: There are strategies you can implement to not only obtain prior authorization for PT services and equipment, but also streamline the process to ensure your patients’ services are covered before you begin treatment (more on that in a moment). But first, even more good news: According to APTA, in 2018, The American Hospital Association, America's Health Insurance Plans, the American Medical Association, the American Pharmacists Association, BlueCross/BlueShield, and the Medical Group Management Association issued a joint statement outlining five ways to “improve the [prior authorization] process, promote quality and affordable health care, and reduce unnecessary burdens:
- “Selective application of prior authorization.”
- “Regular reviews of prior authorization and adjustments for volume.”
- “Better communication and transparency.”
- “Attention to continuity of care.”
- “More automation.”
While we have yet to see how closely insurance companies will actually follow these five strategies, Elise Latawiec, PT, MPH—APTA staff lead for practice management—believes "this consensus statement is a step in the right direction.”
Strategies for Improvement
Now, on to those strategies I promised:
1. Get really familiar with your payers’ authorization processes and guidelines, paying special attention to your top payers.
This may require a deep dive into your contracts to suss out each payer’s specific requirements regarding physical therapy services—or, it may require a phone call directly to the payer. After all, as this Dummies article explains, “Many payers don’t issue retro authorizations, even when the failure to get preauthorization was a mistake.” While some may overturn a denial on appeal, they’re under no obligation to pay if the proper process was not followed. In other words, when it comes to prior authorizations, it’s imperative to cross your t’s and dot your i’s.
2. Establish a solid insurance verification process for all new and returning patients.
As much as you possibly can, ensure your practice is verifying patient insurance eligibility prior to each patient’s first appointment and at regular intervals throughout the course of care. In fact, it’s a good idea to ask patients if their insurance has changed at every appointment (or at least once a month) to ensure that there are no surprises when you go to send a claim. When you—or your front office staff—call a payer to verify patient coverage, it’s a perfect time to ask about preauthorization requirements. For a robust list of information to gather from patients and questions to ask while you’ve got the payer on the line, check out this post.
3. Open the lines of communication between providers and those responsible for obtaining prior authorization.
According to the above-cited Dummies article, in order to obtain a prior authorization, you must have the correct CPT code—the correct CPT code for a procedure that hasn’t been performed or documented yet, that is. And that can be difficult to track down, especially if communication between providers and billers or front office staff isn’t clear or consistent. Instead, make open communication a priority by reinforcing the importance of collaboration among everyone involved in the prior authorization process. After all, a patient who’s left footing an unexpected bill—or a costly write-off for your practice—due to pre-auth errors is bad for business, and thus, bad for the practice.
The same post suggests consulting with providers to determine which services they anticipate delivering—being careful to account for all possible scenarios. Even if you wind up getting authorization for a service that the clinician decides not to provide, it’s better to be safe than sorry. That said, as discussed above, obtaining authorizations does require time, so it’s best not to be too gratuitous with the pre-auths.
4. Understand what’s at stake—and for whom.
So, what happens when a prior authorization goes south? According to the same source, that depends largely on the patient’s insurance plan. If the patient seeks services listed as not covered in his or her plan benefits, he or she will likely end up receiving the bill for those services. However, if a provider fails to obtain the necessary preauthorization for a potentially covered service, he or she may be responsible for the cost—or the insurance carrier may assign financial responsibility to the patient. In the latter case, the provider would then have to choose between billing the patient or writing off the cost. While no one wants to take a write-off, sending this type of bill to a patient is “is bad business.” After all, “patients are both unaware of the process and not in any sort of position to guess what CPT code should be submitted to the insurance company.” In other words, they’re relying on you to secure the coverage they need for treatment.
5. If all else fails, think outside the box.
According to Linda Girgis, MD, the author of this resource, there are a few other strategies that providers might want to employ if for any reason they’re unable to obtain prior authorization for a service that they believe should be approved. Those include:
- Having the patient contact his or her insurance company as well. Unlike providers, Girgis explains, patients “will be talking to member services and sometimes they find a sympathetic ear who helps them get coverage or reveals the holy grail of coverage determination to them. They are often successful when we are not.”
- Having the patient get his or her human resource department involved. After all, “Insurance companies do not want to lose any covered lives so if they find a company is unhappy with the services provided, this can be a very effective weapon,” Girgis writes.
- Speaking with the insurance company’s medical director. According to Girgis, most medical directors “were practicing medicine at some point and understand our struggles on the frontlines.” Thus, they may be more willing—and able—to understand your “medical reasoning” for a particular service than a customer service representative. But even then, Girgis warns, that's “not always” the case. (This may be even harder for a physical therapist, but in an extreme situation, it may be worth the extra effort.)
- Contacting your provider rep. Girgis says he or she “often know[s] the right person to talk to [who] may help you get the service covered.”
For the rest of Girgis’s strategies, check out her article in full here.
While the prior authorization process may have you seriously considering going out-of-network purely to avoid the headache, it is possible to get the stamp of approval you need from payers—with a few strategies under your belt, that is. Have your own pre-auth processes that work well in your practice? Share them below!