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Medical billing authorization is a part of the medical billing process that involves validating whether a patient’s insurance plan covers a certain medical service or not. This is an important checkpoint to ensure that rendered services aren’t denied by the insurance company later. In layman’s terms, consider it as insurance or a guarantee that the insurance will cover the cost of the medical service.
The Importance of Authorization in Healthcare
Simply put, without proper authorization, a medical claim is bound to be rejected. The authorization process provides a sense of security to both parties involved—the provider and patient, ensuring that the patient’s financial responsibility is limited and manageable. It also minimizes the risk of unexpected medical bills and streamlines revenue cycle services for providers.
Parties Involved in Medical Billing Authorization
The authorization and medical billing process is a collaborative effort that involves multiple parties. The major players include the patient, the healthcare provider, a medical biller, and a third-party medical billing team. It’s also common to leverage medical billing software to automate the authorization process and enhance both efficiency and accuracy.
Initiating the Request
First, the medical provider or medical coder identifies the need for a service or procedure. After this, they initiate an authorization request by filling in the suitable CPT (current procedural terminology) code.
Patient Insurance Verification
The next step is the actual verification of a patient’s insurance information. The medical billing team assesses what services the patient’s insurance covers. This step is pivotal in preventing claim rejections later in the billing cycle.
Medical Necessity Assessment
During the medical necessity phase, the medical biller must thoroughly assess whether the requested service meets established criteria to be considered a medical necessity. To justify medical necessity, valid documentation containing details about the patient’s condition and rationale for the procedure will need to be compiled and presented.
Gathering Support Documentation
To justify medical necessity, the medical coder must gather all documentation that provides evidence for the need for the requested medical procedure or service, including physician notes clearly outlining the patient’s condition, relevant test results such as imaging or lab reports that led to the procedure being ordered, referrals, and any other chart documentation that validates the medical rationale behind the decision to pursue the planned course of treatment.
Submitting Your Request
Once all documentation is in place, the medical coder submits the request to the insurance company. Most providers use a secure online portal for this process. The insurance companies then mark this as a received request and begin deliberation.
Authorization Review
The insurance company reviews the submission for approval or rejection. Here, they verify whether the proposed service corresponds with the patient’s insurance coverage and is medically necessary.
Communication of Authorization Status
If the service gets authorization, the insurance company communicates the status to the provider. This information is typically shared through the same online portal where the provider submitted the request.
Provider-Patient Communication
The healthcare provider then informs the patient about the approval or rejection. Clear communication from the provider to the patient regarding their care plan and medical coverage ensures transparency and aids in maintaining patient trust.
Clear communication is essential for improving patient experience during the medical billing process, but it’s not the only aspect. Explore our blog to learn more about how RCM impacts the patient experience.Button: Learn More About RCM
Appealing Your Request
If the authorization request is denied, providers or patients have the opportunity to appeal. The appeal process may require additional documentation or a letter of justification.
What to Do When There’s an Issue in the Authorization Process
If any problems or inconsistencies come up during the authorization process, such as a denial or a request for more information, the medical biller should immediately follow up with the payer to clarify the reason. It is essential to quickly resolve authorization issues by submitting corrected claims, providing additional documentation, or appealing denials when appropriate. Taking timely action when issues occur prevents payment delays, ensures patients undergo approved procedures as scheduled, and keeps revenue cycle operations running smoothly.
How Partnering With a Dependable RCM Company Can Optimize Your Team and the Authorization and Medical Billing Process
The authorization process in medical billing involves many complex steps – maintaining regulatory compliance, verifying insurance eligibility, calculating patient financial responsibility, ensuring accurate medical codes, and more. For busy medical practices, keeping up with these administrative tasks alongside delivering exceptional patient care can become overwhelming for office staff. Partnering with a dedicated revenue cycle management company provides invaluable support with the end-to-end billing process.
Outsourcing authorization and claims management to an experienced RCM provider gives your practice access to the latest medical billing systems and a team of certified professional billers. These billing experts stay up-to-date on changing regulations and coding to guarantee clean claim submission and reduce rejection rates. An RCM company also handles confirmation of patient insurance eligibility and benefits to minimize denials, explains patient financial obligations to maximize collections, appeals improper claim denials for maximum reimbursement, and takes on many other burdensome billing tasks. This allows your staff more time to focus on delivering quality care. With an expert RCM company handling the complex authorization process, medical offices experience improved revenue cycles, operational efficiency, and patient as well as staff satisfaction.
Partner With Horizon Healthcare Today to Streamline Your Authorization and Medical Billing Process
Does your medical practice face challenges managing billing authorization and revenue cycle processes? At Horizon Healthcare RCM, our team of certified medical billing specialists have the expertise to handle insurance verification, claim submissions, patient financials, and more. By outsourcing your revenue cycle management to us, you can boost collections and maximize reimbursements while your staff focuses on delivering exceptional patient care. Contact Horizon Healthcare today to learn how our customized revenue cycle solutions can improve your practice’s operational efficiency.
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