In the healthcare landscape, a well-functioning revenue cycle management (RCM) acts as a backbone to retain financial stability and operational success. One critical but often underestimated component of revenue cycle management is the role of the Prior Authorization (PA) team. By ensuring that patient services or treatments are authorized by the insurance payers before your providers render them, this team plays a pivotal role in reducing claim denials and delayed payments.
In this blog, we will explore the six key ways an effective prior authorization team can boost your practice’s revenue and overall bottom line.
Necessity of Prior Authorization (PA) in RCM
The PA process plays an important role in RCM as payers need to confirm whether a particular medication or treatment will be approved or not. In the event of unapproved authorization for medical procedures or equipment, healthcare providers should wait for approval from the payer’s end before performing any necessary procedures. Failure to obtain prior authorization can lead to reimbursement denials, impeding the financial health of your practice.
Insurance payers often use exclusion lists to determine which medications and procedures are covered under the plan and which are not. Patients are denied procedures if any medication falls under the exclusion list. This prompts patients to switch to new treatment plans, despite what the providers originally recommended, resulting in increased patient dissatisfaction. This necessitates obtaining PA before any services are rendered to avoid complexities.
How Prior Authorization Team Can Improve Your Revenue Cycle Management
- Reducing Denials Through Accurate Authorization
Many claim denials stem from a lack of authorization or incorrect documentation. An effective prior authorization team can meticulously submit all required documentation and track auth requests till closure. This proactive approach ensures payers have the required information they need to process the claims promptly, reducing the risk of denials or delayed payments.
2. Leveraging Technology Integration for Authorization Accuracy
In today’s fast-paced environment, technology utilization has become integral, especially in the healthcare sector. With the help of advanced technology, authorization can automate insurance verification and prior authorization process which might save a lot of time. Tools that allow teams to check for eligibility in real-time reduce the likelihood of error and improve accuracy.
3. Eliminating Bottlenecks in The Revenue Cycle
Waiting for prior authorization process can create bottlenecks in the RCM process, such as delaying payments and enhancing administrative costs. By streamlining the authorization process with automation, an expert team can omit these bottlenecks, resulting in a smooth revenue stream for your practice. A faster prior authorization process can lead to faster claims submission and quicker payments from the payers.
4. Strong Communication Between Payers and Providers
Lack of communication is another challenge often faced by healthcare institutions. Prior Authorization team acts as a bridge between providers and payers, establishing an open line of communication. They help in avoiding misunderstandings and confirm insurance requirements for specific services before they are rendered. This helps to submit clean claims the first time.
5. Enhancing Patient Experience and Satisfaction
Patients are often unaware of the intricacies behind the authorization process. An efficient authorization team increases patient experience by managing all authorization requests on their behalf. This reduces stress for patients as they do not have to worry about whether their services are approved by their payers or not.
6. Faster Cash Flow Through Real-Time Verification
One of the most impactful ways for authorization teams to enhance revenue cycle management is through real-time verification of insurance coverage. A team equipped with technology and knowledge can obtain prior authorization within minutes, allowing providers to render services without unnecessary delays.
Challenges Faced in Prior Authorization Process
Prior authorization is one of the important components of the revenue cycle, but it is rife with challenges due to the high volume of auth requests received by the healthcare sectors. Let’s explore the challenges in the PA process below:
- Increased Auth Requests and Staff Shortages
A 2021 AMA report revealed an increase in prescription medications and medical services requiring prior authorization, while health systems face staffing shortages, quoted by 84% of physicians. This enhances the administrative burden on providers who are forced to complete 41 prior auths weekly which is an extremely time-consuming process.
2. Ever-changing Payer Rules
Evolving payer rules is perhaps the biggest challenge in the prior authorization process. A 2021 poll by the Medical Group Management Association (MGMA) revealed that there are inconsistencies across payers and there are frequent updates in their requirements concerning prior authorization. The shifting rules and overall payer complexity make it difficult for the health systems to stay updated, resulting in longer approval times and more denials.
3. Lack of Transparency
Lack of communication is another headache for the providers to get approvals quickly. As per the 2021 AMA survey, 62% of physicians report difficulty determining whether medical services require prior authorization or not. Some payer portals simplify accessing required authorization information by requiring a CPT code for a procedure, while others require contact and verification of patient benefits, causing delays.
4. Administrative Burden and Burnout
Healthcare providers are experiencing high levels of stress, with 93% reporting feeling stressed and over three-quarters feeling exhausted. The workload is exacerbated by rising patient volumes and staffing shortages as well as the increasing complexity of payers and prior authorization processes.
Best Practices to Avoid Major Disruptions in the PA Process
Healthcare providers invariably face problems in the PA process. To avoid these problems, the PA team can follow the best practices to increase the bottom line.
- Correct handling of CPT codes is vital to ensure all services are properly documented in the system.
- Continuous interaction between providers and payers is crucial to avoid miscommunication, resulting in faster approvals for claims.
- Provide detailed documentation to obtain prior authorization and follow up with the payers regularly.
- Establishing transparency so that patients are aware of any unexpected bills or out-of-pocket expenses after receiving care.
- Inform patients about emergency patient admissions.
How Partnering with a Reputable RCM Company Can Help
The authorization process in medical billing encompasses complex regulatory requirements, verifying insurance coverage details, determining patient responsibility such as copay, coinsurance, deductibles, etc., and ensuring accurate codes and modifiers for the services rendered. For providers, keeping up with these administrative tasks alongside providing exceptional patient care can become overwhelming. To avoid these cumbersome and tedious processes, partnering with a reputable company will be the best option in hand. Outsourcing prior authorization to an experienced RCM company gives your practice access to certified billers, equipped with all facets of prior authorization. These billing professionals stay up to date with the changing regulations and coding can guarantee clean claim submission and reduce rejection rate.
At RCM Workshop, our team of certified Prior Authorization specialists has the expertise to manage all facets of your PA process. By partnering with us, you can boost collections maximize reimbursements, and focus on delivering excellent patient care. Contact RCM Workshop today to learn how our tailored revenue cycle management solutions can improve your practice’s operational efficiency.
Conclusion
In today’s fast-paced healthcare environment, maximizing revenue cycle efficiency is pivotal to the success of any healthcare practice. By minimizing claim denials, improving communication with payers, and managing denials proactively, a dedicated prior authorization team can make a substantial difference in your revenue cycle management. Effective RCM requires more than just handling claims; it involves ensuring that every step, including Prior Authorization, is streamlined for success. An efficient authorization team ensures every service is approved, resulting in improved financial health and reduced out-of-pocket expenses for the patients.
