Prior Authorization, The Initial Step To Holistic Revenue Cycle Management

Explaining the essence of Prior Authorization, the beginning verification procedure between the patient, provider and the payer and that starts the process of medical Revenue Cycle Management in the medical industry around the world.

What is Prior Authorization?
It is the basis of Medical Revenue Cycle Management, which determines a smooth flow of cash in exchange of medical services, ensuring sound medical practice, unaccumulated unpaid accounts and a healthy patient, provider and payer nexus. In a nutshell, it means authenticating the patient’s insurance profile to ensure that the medical service that he has opted for is duly covered by the respective insurance company he is registered with. More often than not, in the absence of pre-authorization, medical revenue is often denied leading to piling of rejected claims, denial management pandemonium and industrial acrimony.
However, it is much more than insurance policy verification. It also includes checking the requirement of collecting any co-payment, if the patient holds any co-insurance and the amount of the same etc. The entire process of pre authorization was intended to make medical billing cost-effective, safe and time-saving.
The various reasons that have necessitated pre authorization are age, medical stipulations, the requirement of medical alternatives and drug specifications. Failure to meet the authorization results in denial of services or the patient subjected to an initial procedure which requires him to clinically prove that a certain treatment (preferred by the insurance company) is inapplicable on him before the payer agrees to pay for the alternative medication.

What is the process that is followed for pre authorization?
Prior Authorization starts with the practice management receiving a request from any provider. The entire authentication process starts after that which includes filling up and submission of a pre-authorization form. The protocol followed varies according to the rules of the practice manager and the payer. If a certain medical process is rejected by a payer, the practice management, on behalf of the provider may contest that by filing an appeal. In other cases, additional information is requested for by the payer from the provider.

What is the purpose and cost of the process?
Pre Authorization was originally intended to prevent prescribing medicines and treatments that are expensive, irrelevant and risky. It was also meant to make medical treatment cost-effective and less complicated. However, the technical knowledge and insurance awareness that is required to be known in order to execute prior authorization plans successfully cannot be acquired by the doctors and clerical staff of medical service providers easily. As a result of which time and money are wasted. In order to reap the actual benefits of pre authorization, providers have to take the help of customized practice managers who specialize in revenue management protocols, including pre authorization.

How to eliminate the challenges in prior authorization?
The biggest challenge in the pre-authorization process is the volume of work that gathers. The number of times payers refuse to pay and providers contest claims often outnumber each other, thus leading to time constraints and conflicts. Electronic authorization is an effective solution to the problem, though there is still time before it is implemented completely.

Streamlining of the pre authorization process is another way to clear the problems in the way of meeting successful authorization. Best results can be obtained by combining manual and mechanical ways. Some of the technical tips for improved pre authorization are

Smooth prior authorization will not only enhance recovery of medical revenue but also will generate good faith and healthy atmosphere in the medical industry. Medical service is an emergency service which needs to be supported by a sound revenue management cycle.