The method of retroactive authorization in medical billing has rapidly decreased as of late, mainly because of its diminished viability. Retroactive authorization can make room for arguments and appeals fighting the lack of prior authorization which, as result, can cause labs to lose revenue. By not obtaining authorization for certain tests and other lab processes prior to conducting tests, labs are risking losing compensation for their testing.

The Basics of Prior Authorization

Prior authorization is a revenue cycle management tool that health insurance companies have adopted to require that certain tests, procedures, and medications prescribed by healthcare professionals must first be evaluated to assess the medical necessity and cost-of-care ramifications before they are authorized.

Insurance companies utilize this method as it allows for exploration into less expensive treatment options that may be more sufficient for the patient.

How Does It Work?

When a healthcare provider decides which route of treatment to take for their patient, they must then verify with that patient’s health care policy to determine whether a prior authorization is required and then submit the proper request to obtain it. When submitting a request, providers must submit information such as name, gender, date of birth, address, health insurance ID numbers, and other contact information, all of which must be accurately submitted for proper processing. When done manually, this can allow for error.

Because rules of prior authorization often differ from health plan to health plan and are constantly changing, it is imperative for the provider’s administrative staff to be kept up to date with the most accurate guidelines. The responsibility then falls upon that staff to follow up with the insurance company until the prior authorization request is resolved. This can cause delays and wasted time, halting the course of treatment and delaying patient access to care.

Reducing Administrative Burden

By automating the prior authorization process, the burden that would be on the administrative staff and revenue cycle management team is now a cleaner, more independent process. This is increasingly helpful as prior authorization’s popularity grows and providers obtain more patients.

Rather than keeping two separate systems for revenue cycle management, many electronic prior authorization solutions can be integrated with clinical and financial management systems. Rule sets can be automated to ensure the software is constantly up to date and tracking of requests becomes less of a burden to the provider.

Get Help With Credence Global Solutions

At Credence Global Solutions, we want to make your revenue cycle management as seamless as possible. We provide AI-driven options that will help you to make the right choice for your company and remove the burden of manual prior authorization from your administrative staff. At Credence Global Solutions, the services and products we offer will ensure client satisfaction, optimization, and increased efficiency by utilizing accurate AI solutions. Contact us today to see how we can help you!