Preauthorizations in Jeopardy: Online Payer Portals and Third Party Vendors Complicate Process

Preauthorization – a process created by payers to preemptively review treatment decisions – has long been seen as a bureaucratic hassle factor for practitioners. Despite its unpopularity, payers are far from making improvements and, in fact, many sources confirm that precertification problems are growing as payers experiment with changes to the unpopular and costly reimbursement prerequisite.

According to a recent report released by CAQH CORE, the preauthorization process could be both improved and less costly with standardized across all participants. CAQH CORE is the industry alliance between healthcare payers and providers which reviews and make recommendations regarding healthcare data exchange improvements. To facility the ease of data exchange, CAQH has long been involved in seeking to standardize claims data. With electronic claims data interchange standards now widely followed, CAQH CORE has widened its research to other areas of the revenue cycle and has developed operating rules specific to preauthorization data exchange.

The CAQH CORE precertification standards seek to establish preauthorization response times, connectivity, acknowledgement of receipt of requests and real time and batch processing requirements. The standards also encourage vendors to adopt “selective application” of preauthorization requirements by discontinuing preauthorization requirements for procedures which are routinely approved.

Unfortunately, however, preauthorization requirements seem to be expanding and wait times growing. Many billers are finding that payers are making constant changes to processes which directly impact efficiency, days outstanding and, ultimately, revenue.

“Payers are going toward using more online portals. Some payers have even completely done away with their preauthorization department internally so there is no one you can even talk to. They are outsourcing a lot of their preauthorizations to companies like eviCore where they deal with all the preauthorizations and then the payer gets that information back. The problem that we seeing with that is that one hand is not talking to the other,” said Stephanie Thomas, billing director for CE Medical Group. “It has increased our denial rate for preauthorizations and we have having to fight more for our money.”

Interest is growing in standardization partly in response to public scrutiny of the costs associated with the US healthcare system. CAQH CORE estimates that adoption of standardized prior authorization process by health plans and healthcare providers could result in savings of $6.84 per transaction, making it one of the areas with the highest margin for cost saving improvements in the healthcare revenue cycle. However, CAQH reports that adherence to the current standard is declining as many payers continue to make large scale changes to internal preauthorization processes. See for additional information.
One of the biggest impacts to preauthorization standardization is the payers’ increasing use of patient portals as the point of access for preauthorization processes. Portals are yet another payer-specific access point for practitioners to navigate and many portals vary in their ability to accept unstructured clinical data.

Yet another threat to standardization is payers’ use of third party vendors for preauthorization review. Many payers contend that third party vendors can provide preauthorization more efficiently and at a lower costs that internal departments. Further, specialized vendors are able to focus on one area of medicine and build a wider network of specialty focused personnel for reviews. Unfortunately, some billing professionals are not seeing improvements on the practitioner side and many times communication between insurer and review vendor is poor.

Thomas states that preauthorization denials are often successfully overturned. However, capturing data exchange acknowledgments and approvals can be instrumental in the appeals. She recommends asking for reference numbers, when possible, or taking screen shots of approval screens. Both suggestions are meant to document the exchange and create a “preauthorization paper trail” to utilize in a dispute.

“A screenshot has the time and data documented so they (payers) can look back in their system on that date. It is easier for them to be able to utilize their software to see where we did call in or where we did do the preauthorization on the portal,” Thomas said.

Portals are often launched as an effort to “streamline” preauthorization and walk providers through routine preauthorization screening questions. For example, procedure-specific questions may seek information on the severity of pain or what treatment has already been tried.

“We find a lot where our preauth people are kind of fudging the information which can be very dangerous. They are just trying to get preauthorization so that the patient can come in and have the procedure but we are finding they are entering things not in the records,” Thomas said.

Thomas encourages frequent staff training regarding conducting a successful, compliant precertification process. In putting together training. Thomas said a cross training approach between preauthorization and billing staff is often effective. Billing staff are often able to provide preauthorization personnel a working understanding of payer requirements, local coverage determination and specialty-specific policies.

Thomas also recommends setting up a precertification reference library. Her clients often create payer-specific binders full of the questionnaires specific to their top procedures. This allows the preauth staff to better familiarize themselves with the clinical requirements as they work with patients to obtain the necessary approvals. Payer representatives may also be available to training staff of payer portal use, Thomas said.

One other suggestion for internal best practices is to not schedule the procedure until the preauthorization is securing. Some preauthorization take up to two weeks, Thomas said. However, it is critical to have the approval in place before treatment occurs. Therefore, make sure preauthorization staff has some tracking tool in place for preauthorization followup and that prompt, thorough communication guidance is in place between the preauthorization, scheduling and clinical teams.

Our interview with Ms. Thomas is available at our website, Click on Education and Podcasts.

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