Introduction of authorization in medical billing

There is a big difference between prior authorization and retro authorization in medical billing. Retro authorization only applies to claims that have already been processed, while prior authorization must be obtained before services are rendered.

Prior authorization is required for some procedures and tests in order to ensure that they are medically necessary. Retro authorization, on the other hand, is not typically required and is only used when there is a dispute over whether a service should be covered.

Box no 23 on the claim form is used to indicate whether prior authorization was obtained. If retro authorization is needed, this will be noted in Box 19.

When submitting a claim, it is important to include all the necessary information to avoid delays in processing. Make sure to check with your If you have any questions, please contact your medical billing company. payer to see if prior authorization is required for the services you are billing. Retro authorization should only be used when there is a dispute over whether a service should be covered.

Why is authorization required for medical billing?

There are a number of reasons why authorization may be required for medical billing. In some cases, it is simply to ensure that the service is medically necessary. In other cases, an authorization may be required in order to get approval for a certain procedure or test. In some cases, an authorization may be required in order to get reimbursement from the payer.

It is important to check with your payer to see if prior authorization is required for the services you are billing. Retro authorization should only be used when there is a dispute over whether a service should be covered.

Who is responsible for getting pre-authorization?

The provider is responsible for getting pre-authorization from the payer for the services to be rendered. The provider needs to submit the required documentation to the payer for review and approval. Once approved, the payer will issue an authorization number that the provider can use to bill for the services.

What are authorization levels?

There are three levels of authorization: level 1, level 2, and level 3.

• Level 1 authorization is the most basic level of authorization. It simply requires that the payer approve the service in order to get reimbursement.
• Level 2 authorization is a bit more complex. It requires that the payer not only approve the service but also provide a pre-authorization number.
• Level 3 authorization is the most complex level of authorization. It requires that the payer not only approve the service but also provide a pre-authorization number and complete a medical review.

When can a Claims Deny For No Authorization

Reducing the claims denials requires a lot of hard work and process needed. prior authorization is a mandatory thing for a provider before treating the patient for high-end surgeries and treatment. As a result, 80% of claims denied have No Prior Authorization denial in them. or in certain scenarios authorizations improperly requested for processing the claim.

There is a different type of case where prior auth is needed such as Emergency medication, Treatment that has an immediate need. Due to this type of denial prior approval is needed.

Everything is fine what is the next step? how can I rectify it?

Payers require authorization prior to the service or within fourteen calendar days from the date of service rendered. if you ask for authorization after 14 days or a specific time then it is called Retroauthorization. This occurs typically in extenuating circumstances.

On account of retro authorization, the provider can ask for a reconsideration. This is to say, Hospital billers will file an incomplete claim. This in turn can cause passed timely filing. Hence claims can be appealed with Proof of filing for reimbursement.

Important Reasons claims are denied due to predetermination  Change in Payer rules plays a vital role. This can be rectified by resubmitting the claim with the requested information from the payer’s updated specifications. This is when a new practice evolves payers’ requirements for preauthorizations are unfamiliar. Follow the same point as mentioned above. Billers and claims don’t adapt to changes and need additional rules for then preauthorization. The practice couldn’t handle prior authorizations so it will hand over to the vendor for outsourcing.

 Case study of No Prior Authorization

Office of Inspector General (OIG) released a report in September states that Medicare Advantage Organizations(MAO) has returned 75% of pre-authorization, claim denials from  2014 to 2016. The study report found says minimum providers appealed  MAO which is  (1%), and those appealed claims were reimbursed oddly. So to eradicate the denial we can follow these five steps.

Best tips to reduce claim denied No Prior Authorization

Appeal at the right time	Make a frequent appeal even if the time frame meets the time limit.
Medical records	Resubmit the required medical records and documents to appeal them.
Validate the CPT codes	Before submitting the claim check for the Cpt whether it needs authorization. If you find the service needs to be authorized then check for the authorization number on the claim form. This validation can help you to prevent auth denial.
Follow clinical guidelines	According to the government sources such as AHRQ, it is always good to follow the medical clinical guidelines to avoid errors.

Questionnaire Flow chart for Authorization denial

 

 

Recommended action

In short, There can be two scenarios for authorization denial. Firstly, if you find the auth number on the claim form and if denied as invalid. Check for auth number on hospital claim. Secondly, If the claim has no auth number on the claim form. Obtain it from the provider and check for the retro auth possibility.

Read more ——- >Medical Record Denial and HIPAA Act 1996