June 1, 2009
How to Handle Preauthorization Issues
By Kathy Hardy
Vol. 10 No. 11 P. 18
When casting the parts for players in the preauthorization drama, most experts think imaging providers should typically take the passive-aggressive role. They want patients to receive the proper exams, yet they can’t get too involved in securing preauthorization approval.
If the insurance or radiology benefits manager (RBM) doesn’t approve the exam, imaging providers are faced with further conflicts, weighing the risk of nonpayment against the risk of crossing the compliance line, and deciding whether to approach the insurance companies directly.
According to Brigette LaBar, a medical billing and physician practice management consultant in Yorba Linda, Calif., there is no universal role imaging service providers should play in the preauthorization process. LaBar, who also serves on the board of directors of the Radiology Business Management Association, says some imaging centers get involved in obtaining preauthorization even though the burden is really on the referring physician. In either case, she’s strict about following compliance requirements for the state in which the facility is located.
“The RBMs have made their policies and rules very black and white, but some healthcare providers try to paint in gray,” she says. “With too much gray, the provider could find their agreements with payers at risk.” The imaging center may be asked by the referring physician to assist in obtaining preauthorization, but “the referral for an exam needs to come from the referring physician.” Too much involvement on the part of the imaging provider raises concerns about self-referral.
Family physician Ted Epperly, MD, FAAFP, who practices in Boise, Idaho, and also serves as president of the American Academy of Family Physicians, says that if the radiologist agrees that he or she has ordered the proper exam for a patient’s condition, that information can be mentioned to the insurance company or RBM during the preauthorization process. But this assistance works best on the front end rather than during any appeal process, he notes.
Keeping imaging providers’ involvement to a minimum during the initial preauthorization approval process is the best course of action, says Steven Housberg, president of Peak Healthcare Solutions in Sugar Loaf, N.Y. Housberg, who is also a member of the American Medical Billing Association’s National Advisory Board, tells his clients that they should not provide any services if preauthorization is required but not obtained, nor should they get involved in the approval process other than to confirm preauthorization status. However, since it is oftentimes difficult to rely on the referring provider to obtain preauthorization, the imaging facility will need to assume a prominent role if they want to be reimbursed for their services.
“If the insurance company isn’t going to authorize the exam, then they won’t pay for it,” he says. “If the patient understands their insurance plan won’t pay for the exam but wants to proceed anyway, the patient should be treated as a self-payer.”
If the patient wants to proceed with imaging without prior authorization, Housberg says imaging centers should have patients sign a statement that they understand they are assuming the cost and their insurance may not be billed. He also suggests that the imaging facility may want to request payment up front or establish a payment plan with the patient as a guarantee.
The best method for avoiding these potentially unpleasant scenes is to make sure the referrer obtains the proper preauthorization in the first place. Providing the right information in a timely manner can make the difference when it comes to navigating through an RBM to obtain preauthorization for imaging services. Insufficient patient data can result in a delay or denial. Imaging facilities may benefit from making certain that their referrers understand the information they need to provide to secure preauthorization.
With that, American Imaging Management Senior Vice President for Medical Affairs David Soffa, MD, says referring physicians requesting preauthorization for an imaging exam would do best by providing the following information to RBMs:
• the patient’s name and vital information;
• the name of the ordering physician;
• imaging provider information;
• the imaging exams being requested, including modality and what body part is involved;
• the patient diagnosis, including clinical symptoms; and
• what treatment has already occurred and the results.
“There’s a perception that there is a tremendous burden on the physician to obtain preauthorization,” Soffa says. “Only 50% of our calls are coming from physicians who order less than one exam per week. Up to 80% of physicians calling order one to two exams per week. The average interaction takes between three and four minutes, so that means the majority of physicians seeking preauthorization are only accessing our support network six to eight minutes a week.”
For the imaging facilities, the best approach is to use a confident and reliable office staff person to work as the agent between them and their referring physicians, as well as between the physician and the insurance company or RBM. Personnel should have a system in place to verify benefits, check for preauthorizations or reauthorizations, be aware of the proper CPT code for the exam being ordered, and make sure that the CPT ordered will be covered, Housberg says.
“In general, the person who handles your billing needs to be knowledgeable of insurance trends, what is being scrutinized as overutilized coding, what is improper coding, and what is not medically necessary,” Housberg says.
He also stresses that knowing the insurer’s policies is particularly important when it comes to the timing of reauthorization and plans for continued treatment where procedures are performed in sets over a period of time. This may apply to radiation oncology centers, for example, where procedures are done in batches of 10 to 15 treatments at a time.
Radiologist John A. Patti, MD, FACR, vice chair of the ACR’s Board of Chancellors, suggests having a staff person “who will really hound dog it,” particularly when it comes to working a denial through the claims adjudication process.
“Each case is different and requires diligence to see it through to its final resolution,” he says. “The key for radiology facilities is having a dedicated staff gatekeeper to handle all incoming calls from referring physician’s offices. That person should have all patient information, including the RBM-issued preauthorization number, in hand before the exam is scheduled.”
At times, your facility may appeal preauthorization denial. The appeal process can be used as a way to have an exam approved or even to obtain payment for a procedure. LaBar notes that some RBMs allow for retroactive authorization, but most use the lack of a prior authorization to deny payment.
“Imaging centers are 100% at risk of nonpayment for conducting an imaging exam without preauthorization,” she says.
However, Housberg cites examples of how an appeal can be successful in recouping reimbursement lost to lack of preauthorization.
“Maybe the doctor made a mistake in not calling for preauthorization for that particular exam,” he says. “If he had called, it would have been approved. It was a mistake, and it won’t happen again.”
Housberg has successfully appealed denials on the basis that if preauthorization were requested in a timely manner, the exam would have otherwise been authorized. Therefore, the services performed were medically necessary and provided in good faith by the provider and in the best interest of the patient’s care. He “respectfully” requested that the insurer reconsider the negative determination and further explained that the provider would not make this mistake again.
In some cases, Housberg says, it is in a patient’s best interest to contact the insurer directly when it comes to appealing preauthorization denial. Oftentimes, a patient makes a greater impression on an insurer to pay than when a healthcare provider calls.
“Hearing from the patient strikes a chord with the customer representatives,” he says. “Insurers don’t want to lose subscribers and sometimes act to keep their members complacent.”
LaBar says that, ultimately, imaging providers need to work with their payers, as individual decisions are based on the compliance guidelines in that specific area.
“There is no universal answer for this,” she says.
— Kathy Hardy is a freelance writer based in Phoenixville, Pa., and a frequent contributor to Radiology Today.
A Look at the Referrer’s Role
Family physician Ted Epperly, MD, FAAFP, understands that navigating the preauthorization process falls primarily to referring physicians rather than imaging facilities. Epperly, who practices in Boise, Idaho, and serves as president of the American Academy of Family Physicians, believes it’s best to rely on a savvy reimbursement staff member to work with the RBM or the insurance carrier directly to obtain preauthorization, particularly if approval is needed that day.
“Physicians need to continue caring for other patients while the preauthorization process takes place,” he says.
As a method of speeding up the approval process, Epperly suggests preparing the patient’s information prior to his or her office visit and then initiating the preauthorization process online if the patient’s condition warrants an imaging study.
“We use this technique to make the process more proactive and less of a hassle,” he says. “If you do that, you have a chance of reducing your denial rate. You’re taking care of the paperwork up front for a better chance of approval.”
Epperly also recommends that before ordering an imaging exam, physicians need to have an understanding of the medical criteria for that study.
“For lower back pain, I know what I have to do before I can order an MRI,” he says. “In the preauthorization process, I don’t mind being asked if I’ve tried physical therapy or medication first. That’s as it should be.”
He adds that doctors need to educate their patients as to the proper treatment for their medical conditions, explaining that there may be several remedies that should be tried before resorting to an imaging scan. Just because a patient’s neighbor was immediately sent for an MRI to find out what was causing his aching back doesn’t mean the same thing should happen for this patient.
“Make sure you educate the patient as to what the process is for treating certain conditions,” he says. “Americans want to be fixed now. They come to the office with pain and want immediate relief.”