Preauthorization Obtained But Not Honored: Utilization Review Standards Can Improve Preauthorization Appeals

When medical preauthorization is not honored, it is often up to the billing professional to determine why.
Where should you start?

First, know the law. State utilization review laws vary considerable. Some states require carrier to honor a preauthorization unless incorrect information was provided during the preauthorization process.

Second, know the Utilization Review Accreditation Commission standards. Many health insurance carriers are accredited by the Utilization Review Accreditation Commission (URAC). URAC Health Utilization Management standards provide an appeal position for not honoring preauthorizations because URAC Health Utilization Management standards specify that accredited organization cannot reverse a certification determination unless it receives new information not available when the precertification was extended.

Third, submit an inquiry seeking clarification regarding health utilization standards followed by the carrier. Such inquiries do not necessarily qualify as an “appeal” but can help clarify how to initiate the appeal and what protections apply to the review process. See the following wording:

Your company approved the above referenced treatment. The medical claim was submitted as directed but remains unpaid.

The American Accreditation Commission’s URAC Health Utilization Management Standards require member organizations to conduct utilization review according to written standards. Further, the patient, provider, or the facility rendering service rely on precertification decisions for prompt payment. URAC Standard UM 24 limits reversals of certification determinations as follows:

The organization does not reverse a certification determination unless it receives new information that is relevant to the certification and that was not available at the time of the original certification.

It appears your reversal of this determination is not compliance with the above stated standard. Your prompt response is appreciated.

The URAC standards are available at www.dol.gov/ebsa/pdf/MHPAEA190.pdf or you can go to URAC.org to research the accredited companies, obtain carrier contact information and submit complaints related to carrier compliance with the standards.