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Insurance preauthorizations: How to make the process less painful

A column about keeping your practice in good health

By Victoria Stagg Elliott is a longtime staff member. She covered practice management issues and wrote the "Practice Management" column from 2009 to 2013. She also covered public health and science from 2000 to 2009. Posted April 5, 2010.

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The frustrating process of preauthorizing medical care with third-party payers does not have to take as much time as it does, practice management experts say.

The process can be automated. Or, practices can note what issues trigger a denial, and adjust their processes to quicken and gain approval.

And while insurers normally view precertification as a nonbillable service because it's considered part of a medical visit, evidence of how much time it takes can be used as a negotiating chip with insurers.

"It's supposed to be built into the revenue for the services that doctors are providing, but it can be an administrative nightmare for practices. Every insurance company requires something just a little bit different," said Rhonda Buckholtz, vice president of business and member development at the American Academy of Professional Coders. "But we can simplify the process as best we can."

The first step is to analyze how the office handles the process. Is it possible to get some preauthorizations completed before the patient comes in? Are there insurer-provided online tools that the practice is not taking full advantage of?

For example, Elizabeth Woodcock, principal of Woodcock & Associates in Atlanta, said she worked with an endocrinology practice that entered precertification information into an insurer's online system. But, rather than submitting it electronically, staff printed it out and faxed it, which took additional time.

"Make sure you are using all the automation that the payer allows," Woodcock said.

Experts also suggest creating some kind of tool that staff can refer to with all the policies and procedures of various insurers. This does not have to be particularly high-tech. For instance, Buckholtz has set up three-ring binders at several medical practices she has worked with. The binders can be particularly handy if the person who usually handles preauthorizations is out of the office.

Dealing with denials of the initial request for precertification also can be time consuming, but experts say the situation is another opportunity to look for time savings. Are there consistent issues that trigger a denial? Are certain codes always left off? Are necessary lab tests not being noted?

"Go back through the process and ask: 'Am I doing everything right?' " said Marilyn Happold-Latham, an independent practice consultant in Portland, Ore.

Experts also advocate starting the preauthorization process before the patient leaves the office. At the end of a visit when it appears preauthorization will be needed, a staff member who handles the process can be called in to get it started while the file is still open and information is still fresh in everyone's mind.

"You want to capture all of the information before the patient ever leaves the room or the practice," Buckholtz said.

And some offices have had luck on increasing pay rates by approaching insurers with information about how much time preauthorizations take.

"Most physicians avoid going to the table or picking up the phone, but it can be a huge step forward," Woodcock said. "But don't just say, 'I want more money.' Have quantitative data on how much it costs to be a participant in their program. Does it always work? Of course not, but you have a much better shot than if you never picked up the phone."

Some practices also have tried to have patients handle preauthorizations, although with little success.

For example, the staff at Black Hills Orthopedic & Spine Center in Rapid City, S.D., tried having patients handle preauthorizations, but found that it actually took up more practice time, not less. The staff spends nearly 20 hours a week on preauthorizations despite doing everything else it can to streamline the process.

"The complexities are far too challenging," said Jennifer May, MD, one of the practice's rheumatologists. "We have considered this, but it just leads to too many phone calls and questions from patients. We end up doing it anyway." Having the patient handle preauthorizations also may contravene insurer contracts.

Several medical societies, including the American Medical Association, have policies advocating that utilization review efforts focus on outliers rather than all physicians. The AMA also strongly supports fair compensation for administrative costs when providing services to managed care patients.

Victoria Stagg Elliott is a longtime staff member. She covered practice management issues and wrote the "Practice Management" column from 2009 to 2013. She also covered public health and science from 2000 to 2009.

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