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Pre-Authorization of Services: A Proliferating Roadblock to Patient Care and Payment

Long gone are the days when a patient with a health plan meant predictable, reasonable payments for the medical provider. Reimbursements to medical providers have steadily decreased over the last two decades. During the same time period, the cost of running a business has

increased with mandates for new technology, increased office rents and growing payroll obligations. But now, health plans are imposing a growing new roadblock for medical providers- requirements of pre-authorization of service.

Pre-authorizations are being used not only on expensive services, but even on routine medical services such as prescription medication and general diagnostic services. Failure to receive a required pre-authorization likely means a penalty in payment or full denial of payment. Even worse, as an added penalty, in-network providers might be contractually prohibited from balance billing the patient for medical care rendered.

With the potential of cutting off needed care for patients, providers should undertake the pre-authorization process with a formal procedure. This procedure starts with your verification of benefits process. It is important to ask the health plan whether there are pre-authorization requirements for diagnostic tests ordered or common procedures conducted by you. When pre-authorization is required, it is important to have template letters created to ensure the right information is provided to the health plan. If the plan denies authorization, an appeal should be filed immediately. A formal, detailed procedure for getting pre-authorization will allow you to efficiently and effectively get approvals.

It is important that medical providers recognize the growing use and requirements of pre-authorizations and incorporate new procedures sooner rather than later. With patient care and the provider’s own financial well-being at stake, it would be costly mistake for denials of pre-authorization to stop the flow of needed care.

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