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Pre-authorization received, payment denied

September 22, 2012

Question:

Jennifer,

For a number of third party payors I participate with my office is required to confirm pre-authorization for certain services, which recently has required submission of medical records. After we receive pre-authorization and the authorized services are provided, we are denied payment. How can this be?

Thanks,

Dr. K

Answer:

The pre-authorization hurdle is another administrative obstacle we are seeing insurers use to complicate and frustrate the billing process. While obtaining pre-authorization seems to indicate you are in fact providing an "authorized"service, this not the case. In fact, the insurer is treating the service rendered as "authorized" only so long as the documentation noted concurrently for that service satisfies all documentation requirements. So, the fact that you received pre-approval, does not, in the insurers eyes, deem the service rendered automatically payable. On the contrary, many services our office is seeing challenged in audits or recoupment efforts initiated by insurers are for those services that also require pre-authorization. Reason being, those services may have an indicated a pattern of abuse in the past, or may have more stringent requirements to meet documentation and medical necessity standards, so the insurer is creating an additional trap prior to reimbursing.

The advice I have for you not to fall within the "pre-auth" approval, post-service denial is to remain vigilant with regards to documentation, payor policy and coding modifications. Also, you may want to take preventative action by consulting with a coding expert to review your documentation processes.

On a bigger scale, it is obvious that we need a legislative overhaul with regards to a healthcare practitioner's right to reimbursement, and protections in the payor process.

 

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