Why Prior Authorization is Important in Your Practice Management Software

September 19, 2022

While physicians decide which treatments, procedures, diagnostics, and medications are best for their patients, it is ultimately the patient’s choice if they move forward with a mapped out care plan. Unfortunately, in many cases, patients feel that decision isn’t truly theirs due to financial status. This is especially true depending on what services will be covered by insurance (if the patient has insurance at all.) 

Some insurance providers require prior authorization before specific medical treatments, diagnostic tests, procedures, or medications can be administered. If a health plan requires prior authorization and the medical practice doesn’t obtain it in advance, then a claim may be rejected. Prior authorizations prevent patients from receiving surprise medical bills for services they assumed their insurance would cover. 

If prior authorizations are not done correctly and the insurer declines to cover the cost, then the paying responsibility falls to the patient. According to the U.S. Census Bureau, 20% of Americans can’t afford to pay their medical bills. 

When payments aren’t received, the medical practice absorbs the costs of their services. This negatively impacts the practice’s bottom line.

Practice management software makes it easier for medical practices to track prior authorizations for each patient to help ensure timely reimbursements.

In this article, we’ll cover:
  • What is prior authorization?
  • What types of medical treatments and medications require prior authorization?
  • What are the benefits of prior authorization?
  • Why is prior authorization an important feature in practice management software?
  • How Benchmark Systems helps medical practices proactively streamline prior authorization.

What is prior authorization?

Prior authorization—sometimes referred to as pre-certification or pre-approval—occurs when a patient’s health insurance provider approves a specific medical treatment or procedure before it is performed. Some health insurance plans require prior authorizations before certain medications are prescribed. Medical practices often submit prior authorization requests on the patient’s behalf.

Each health care plan has different prior authorization regulations. For insurers, prior authorization helps determine if a medical service is necessary, and that the patient is seeking care with an in-network provider. Prior authorizations help insurance companies prevent paying for unnecessary medical care while clarifying to the patient what their total costs will be.

What types of medical treatments and medications require prior authorization?

Insurers may require prior authorizations for a wide range of medical procedures and medications, including:

Medical therapies and treatments:
  • Home health
  • Physical therapy
  • Behavioral health
  • Cosmetic and plastic surgery
  • Rehabilitative services
  • Orthotics and prosthetic devices
  • Infertility treatments
  • At-home medical devices
  • Out-of-network services
  • Patient transport services
  • Inpatient care and surgery
  • Outpatient care and surgery
  • Hospital admissions
Medications:
  • Specialty drugs
  • Brand-name medications
Diagnostics:
  • Advanced imaging studies
  • Radiology studies
  • Sleep studies
  • Laboratory tests and pathology reports

What are the benefits of prior authorization?

While prior authorizations may add administrative work, they are essential to revenue cycle management. Prior authorization benefits medical practices, patients, and insurance providers.

Practices
  • Reduction in claims denials
  • Improved revenue cycle management
Patients
  • Fewer surprise bills
  • Improved billing transparency
Insurers
  • Minimizes health care costs
  • Prevents waste of medical resources

Why is prior authorization an important feature in practice management software?

Prior authorization processes are cumbersome, inefficient, and require hands-on manual attention from your staff. Without proper software to organize and streamline prior authorizations, patients may experience delays in accessing treatments and medicine they need.

Practice management software vastly improves administrative efficiencies for medical practices. Prior authorization features in medical practice management software help practices plan ahead and proactively ensure patient coverage before services are performed or certain medications are prescribed.

 

How Benchmark Systems helps medical practices proactively streamline prior authorization

Benchmark PM helps medical practices reduce data duplication and errors while maximizing claim reimbursements. 

Benchmark PM prior authorization features:
  • Reporting: With fully customizable billing work lists and convenient reporting tools, medical practices can quickly pull an index of all patients with prior authorizations that are expiring soon. This allows medical practices to inform patients in advance and proactively call their insurance provider to ensure coverage continues.
  • Intake: During patient onboarding, administrative staff can create a medical profile and perform prior authorizations before an appointment or procedure is scheduled.
  • Integrated Claims Management: Medical practices can view their claim status in real-time, allowing them to work, correct, and refile claims. 

Are you interested in learning more about Benchmark PM? Book a consultation with one of our prior authorization and practice management experts. 

Schedule a Consultation