Claims Denied For No Prior Authorization

When Claims Are Denied For No Authorization

Medical billers work diligently to reduce claim denials, but payers continue to expand the number of visit types and procedures that require prior authorization, leading to an upswing in denials. Around 80% of denied claims have to do with no authorization being obtained, or authorizations being requested improperly.

Still, there are types of medicine, such as emergency medicine, that routinely see claims denied for lack of prior approval. So, in the case where no authorization was filed, what is the next step?

Many payers require authorization for services prior to or within fourteen calendar days of services rendered. Requests for approval filed after the fact are referred to as retroactive authorization and occur typically under extenuating circumstances and where provider reconsideration requests are required by the payer. Similarly, personal injury and hospital billers routinely file incomplete claims to meet timely filing, knowing they will be denied, and knowing they will appeal them later.

So first, let’s look at the top reasons claims are denied due to predetermination issues:

1. Payer rules have changed unexpectedly. This will most often result in a “soft” denial remedied by resubmitting forms in accordance with the payer’s updated specifications.
2. The payer is new to the practice, so the payer’s preauthorization requirements are unfamiliar. Same solution. Contact payer or third-party administrator to obtain requirements and resubmit request.
3. Billers and claims managers are simply unable to keep up with changes and additions to so many payer plans precertification rules.
4. The practice does not have the capacity to handle prior authorizations but cannot find a reliable vendor to outsource to.

As frustrating as the prior review process can be—not to mention the expense of denied claims resulting in receivables and write downs—providers should not give up hope. There are practices that can help reduce the number of claims denied due to pre-authorization issues but even in the worst case, where no authorization was obtained, most denials can still be appealed and overturned.

In September 2018, the Office of Inspector General (OIG) released a report that found Medicare Advantage Organizations overturned 75% of their own pre-authorization and claim denials during 2014–2016. The report found that very few providers appealed the MAO denials during the study period (1%), but those that did faced favorable odds. The following are five steps to take when your claims are denied for no authorization.

Best practices for reducing claims denied for prior authorization

1. Appeal – then head back to the beginning. Make it part of your eligibility process to check whether or not prior notification is required for every visit, order, procedure, and referral.
2. Plan for denials. A certain number of denials will occur, regardless of how diligent you are on the front end. Planning for this takes the emotion out of the process—they’re inevitable, so expect it and budget the time and resources to resubmit the required medical documents to appeal them.
3. Double check CPT codes. It’s critical for billers and physicians to work hand in hand to mitigate denials from having an incorrect procedural code on the prior authorization. For example, if a provider schedules a biopsy that doesn’t need prior approval but then excises a lesion (needs prior approval), the claim for the excision will likely be denied. There’s no penalty for authorizing a procedure and not completing it, so it’s better to err on the side of requesting authorization for all possible scenarios.
4. Take advantage of evidence-based clinical guidelines. Thorough documentation based on a respected clinical source is the best way to obtain preauthorization or appeal a denial. In addition to government sources such as AHRQ, it may be worth asking your most frequent payers what guidelines they use.
5. Clearly document any deviation from evidence-based guidelines. For example, if a provider plans to perform a sigmoidoscopy on a 45-year-old patient, it’s critical to include the fact that the patient’s family history includes colon cancer in a first-degree relative at age 40 on the precertification request.

Never be afraid to appeal a payer’s decision. Phone calls to the health plan’s medical director, while time consuming, can be extremely effective in changing outcomes. Similarly, tracking denials by health plan can help your practice identify trends that uncover coverage positions on certain procedures and/or improper coding practices that can be adjusted.

Finally, there are expert service companies that specialize in managing your entire authorization process – often at less cost than your practice is experiencing now – and with remarkable efficiency and transparency that allow your staff to see the status of Auths in Progress in real-time. Imagine reducing your authorization workload by 94%, while decreasing labor costs, and improving patient access to care. Although it may sound dreamlike, the use of Electronic Prior Authorization (ePA) software is increasing daily amidst the growing problem.

For some, it’s time to say goodbye to the misery of obtaining preauthorization and let authorization experts handle the heavy lifting while you focus on patient care. Did you know that the average practice requests up to 26 prior-auths each week, amounting to approximately 16 hours of staff time? Imagine what your practice could do with 16 extra hours per week.

Learn more about AUTHORIZATION DESK software and service by PracticeSuite today.