The Ultimate Step-By-Step Guide to Prior Authorization

What is a Prior Authorization

Your health insurance company requires your doctor to obtain a Prior Authorization (PA), often known as a "pre-authorization," before covering a prescription, medical device, or procedure.

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A Utilization Management Strategy

Health insurance providers use Prior Authorization as a utilization management strategy which requires an evaluation of the medical necessity and cost-of-care implications of specific treatments, tests, and drugs given by medical care practitioners before administering them.

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Prudent Use of Medical Benefits

Getting Prior Authorization prevents the purchase of expensive treatment options when a cheaper one would work. Health insurance companies may recommend less expensive doctors or hospitals to their members. It also helps patients acquire the necessary but expensive procedures and treatments, durable medical equipment (DME), and specialty drugs, to avoid prolonged hospitalization.

How does Prior Authorization work?

The Prior Authorization Process Flow

Here is the series of events preceding a Prior Authorization request process, which typically takes a few days to several weeks to complete, depending on the complexity of the request and the capacity of the healthcare facility or system—

1. A healthcare provider must determine if a patient needs an operation, test, medicine, or equipment.
2. The healthcare provider must check a health plan's policy or prescription to see if Prior Authorization is needed for the prescribed treatment. The healthcare professional must sign a Prior Authorization request form to verify the medical necessity claim.
3. Since clinical and healthcare billing systems are rarely integrated, providers manually evaluate Prior Authorization rules for the patient's insurance plan. The guidelines are typically in paper-print, PDFs, or payer websites. These payer policies are not uniform and vary. Restrictions within a payer can differ from plan to plan.
4. If Prior Authorization is not required, the healthcare provider may submit the claim to the insurance or payer. It does not imply that the claim will be accepted. If Prior Authorization is needed, the physician must research each CPT code corresponding to the desired treatment.
5. A payer-assigned number that matches the Prior Authorization request must be included in the final claim. Payers and providers carry out these procedures manually through phone calls, documents, and emails.
6. Until the insurance provider approves, transfers, or rejects the Prior Authorization request, the healthcare provider must stay in contact with the insurance provider.

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How Long Do Prior Authorizations Take

An insurance company's processing time for a Prior Authorization request depends on various factors, including the complexity of the request, the type of therapy or drug requested, and the insurance company's internal processes and workload. The average time to receive a decision ranges from a few days to several weeks.

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For urgent or time-sensitive requests, some insurance providers may have expedited processes. In these situations, the decision is made in a matter of hours or days. It's always best to check with your insurance company to find out how long they usually take to process Prior Authorization requests and if there are any specific requirements or steps you need to follow.

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How To Make A Prior Authorization Request

What requires Prior Authorization varies from one health plan to another, so your doctor may be unaware that a prescription or test requires Prior Authorization under your plan. 

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Some health plans allow you to log in to your member account or patient portal to find different options, such as whether your plan covers fully, partially, or not at all – your medication or procedure, the price, or any limits and requirements. 

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What happens once a request is made?

One of these five scenarios can occur when your insurance company receives your doctor's Prior Authorization request:

1. Approve your request
2. Deny your request
3. Ask for more information
4. Recommend that you try a less costly but equally effective treatment before your original request is approved
5. Appeal the request if you've been denied

In an emergency, is Prior Authorization necessary?

No, Prior Authorization is not needed for emergency treatment. However, the conditions of your health plan govern the coverage for urgent medical expenses.

Who is responsible for Prior Authorization

Healthcare providers or patients' representatives send Prior Authorization requests to insurance companies. The healthcare provider is usually the best source of information about the requested treatment or medication and can provide the necessary clinical information to support the request.

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The patient or their representative can contact their insurance company and provide the relevant information to start the Prior Authorization process. It's best to confirm with the healthcare provider if they have the information and are willing to submit the request.

How To Get Prior Authorization: Step-by-Step Guide

It's crucial to remember that the Prior Authorization process can vary depending on the insurance company, so it's best to contact the insurance provider to learn about their guidelines and needs. If you realize that you need Prior Authorization, here are the steps to follow—

Step 1: Check client eligibility

Before filing a Prior Authorization request, ensure the patient is eligible for the proposed treatment or medicine under their insurance plan. The next step is to verify the patient's insurance coverage and any treatment or medication restrictions.

Step 2: Determine if a code or service requires Prior Authorization

Identify whether a code or service needs Authorization: Not all treatments or medications require prior Authorization. Check with the insurance company to see if prior Authorization is necessary for the proposed service.

Step 3: Find and complete forms

Most insurance companies have specific forms that must be filled out and filed as part of the Prior Authorization procedure. Find those papers and complete them. You may get these forms on the insurance provider's website or by contacting them directly. Usually, the forms ask for relevant information on the patient, the requested drug or treatment, and any supporting clinical data.

Step 4: Submit a PA request

After the documents are filled, they should be delivered to the insurance provider with additional supporting records. You can do this through the insurance provider's website, by fax, or by mail.

Step 5: Check the status of an authorization

After submitting a Prior Authorization request, it's crucial to follow up and determine its status by calling or checking the insurance company's website. Depending on its processes and workload, the insurance company's PA decision can take a few days to several weeks.

How To Speed Up The Prior Authorization Process: Important Tips and Reminders

Provide correct and complete patient information.

One of the primary reasons that Prior Authorizations take so long to process is that incomplete or incorrect information is submitted to the health insurance provider. Take note that the smallest details matter. If the health ID card number, name, address, etc., is incorrectly typed, it triggers unforeseen delays and, possibly, an automatic denial.

Keep a master list of procedures that require authorizations

Help ensure that the proper procedures are submitted for Prior Authorization and that the process is done on time.

Document causes of Prior Authorization rejection

Understanding why Prior Authorization requests are being rejected can help you avoid similar issues in the future and increase the likelihood of approval.

Subscribe to payor newsletters

Stay up-to-date on changes to the health insurance provider’s Prior Authorization coverage and requirements.

Follow evolving industry requirements.

The healthcare industry is constantly evolving, and it's essential to stay informed about changes that may impact the Prior Authorization process.

Assign Prior Authorization duties to the same people

Consistency and expertise can help streamline the Prior Authorization process.

Organize your authorizations in one place.

Keep track of the status of each Authorization and avoid duplication of efforts.

Utilize technology

Many software tools can help automate the Prior Authorization process, saving time and improving accuracy.

Make a list of your payor contacts for convenient access

Ensure that you stay in touch with the right personnel working on your request.

Keep meticulous and ongoing records of all clinical data

Ensure that the relevant information is readily available to support the Prior Authorization request.

Keep a record of every communication you have with a payor

Keep track of the status of the authorization request and any issues that may arise.

Develop a follow-up plan.

A plan for following up on authorizations can ensure the process is completed on time.

Work on authorizations methodically.

Prioritize authorizations and work through them in a systematic and organized manner.

Request an estimated turnaround time for the authorization process.

Contacting the insurance company and asking for an estimated turnaround time can help you better plan and prepare for the authorization process.

Master the Prior Authorization procedure. 

Starting with this guide, educate yourself about the Prior Authorization process and what to expect to reduce frustration and save time, energy, and resources.

Maintain transparency and open-communication 

Regular and open communication with the health insurance company avoids misunderstandings and ensures a smooth Prior Authorization process. It helps build trust and establish a positive working relationship with the insurance company.

The Bottom-line: Reduce the Administrative Burden of Prior Authorizations

It's widely acknowledged that healthcare providers struggle with justifying and following up on a prescribed treatment with insurance companies. This guide aims to educate patients and healthcare providers on easing the Prior Authorization process – a difficult but necessary undertaking that ensures the proper delivery of medical resources. 

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The burden of "paper-chasing" Prior Authorization requests often results in friction between providers and payers, leaving patients under-served and at risk. In fact, according to the American Medical Association (AMA), physicians spend 16 hours a week on authorizations, and almost 90% say they delay care. 

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Let Pharmbills Clear Your Backlog

Returning those hours to doctors will improve patient care, reduce administrative burden, and enhance payer relations. And one of the easiest ways to reduce the administrative burden of Prior Authorization is to outsource request verification to qualified administrative professionals with the capacity and technology to clear your backlog quickly.

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Interview and Hire Fast!

Pharmbills connects you with highly engaged and qualified back-office support—fast! We have pre-qualified candidates and contractors standing by to complete your Prior Authorization tasks.

In situations where Prior Authorizations take valuable time away from your medical practice, it makes sense to outsource the process. A capable team of admin specialists will stay on top of changes in specifications and have a very efficient procedure for guaranteeing success.

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90-Day Satisfaction Guarantee

When you engage Pharmbills' specialists to be part of your team, be assured of the highest level of competence and professionalism. Every successful candidate you hire entitles you to a 90-Day Satisfaction Guarantee. Let Pharmbills reduce your administrative burden so you can focus on what you do best. Contact sales@pharmbills.com.