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3 Ways to Streamline the Prior Authorization Process

One process that always seems ripe for improvement is the prior authorization process. In this blog we are going to walk you through the prior authorization process, highlight some key statistics around what you can expect, and give you some pointers on how to improve this process within your practice.

Prior authorization is the process where a provider seeks payment approval for a service prior to seeing the client or patient. There are some procedures within the mental health industry that still require prior authorization before seeing the client. For example, if your practice offers psychological testing services then you may have run into this process in your practice before.

It is important to understand this process from a high level and know how you can leverage your resources to make this process easier and faster for you and your clients.

What is the prior authorization process?

  1. The first step in the prior authorization process is that a provider’s office will do a check of the members details and eligibility for a specific service. This means that the client has decided that they are going to use you as their mental health provider and you are going to walk through a process that ensures payment to the practice for those services. Usually, the eligibility process is done by an internal staff member or an outsourced billing provider that knows the right questions to ask.

  2. The next step in the process is that the provider will engage in a further dynamic process to evaluate the specifics of procedures based on the client’s diagnostic code and prior health record. This helps to determine what kinds of services need to be administered and this provides clarity for the insurance company about which services will need to be provided.

  3. The next step is that the provider will submit a prior authorization request to the insurance company. Usually this request is either a form or online document that is then sent to the insurance company for review.

  4. After the insurance company receives this form or online document the insurance company will then begin their decision making process. They may reach out to the provider and ask for additional information or they may move the process along.

  5. The next step is the insurance company does a manual review by the clinical staff at an insurance company. The clinical staff will review the client’s medical record, the procedure that the provider is asking for prior authorization, and the diagnosis.

  6. After the clinical review on the part of the insurance company, the insurance company then makes a decision and notifies the provider of their decision. You may receive this decision in the mail, by phone, by email, or another digital notification modality.

  7. If the provider then disagrees with the decision, the provider will appeal the decision and request more information about the decision.

  8. Once an appeal is sent to the insurance company that automatically triggers a peer-to-peer review of the initial prior authorization request, the process taken to make the decision, and additional review of the client’s medical record.

  9. After the peer-to-peer review, the decision is made and the provider is notified of the final decision.

Key statistics around the prior authorization process?

At this point, you may be wondering what the likelihood of getting a prior authorization approved is through this 9 step process. Fortunately, our friends at Mckinsey have done some thorough analysis in this area and we would like to share those statistics with you. Here is the link to the original article with the research around this process.

  1. In step one, during the eligibility process, 45-55% of services are approved for prior authorization. Which means 45-55% of the services are declined for prior authorization

  2. In step 4, during the manual review process by the clinical staff at the insurance company 75-90% of prior authorizations are approved, which means that 10-25% are declined.

  3. In step 6, during the appeal process, 95% of appeals are approved and 5% are declined.

As you can see, if a service requires prior authorization and the provider’s office has done all of their due diligence ahead of time, then the likelihood of receiving an approved prior authorization is optimistic.

It is important to keep in mind that you are able to appeal negative decisions, but the real question is how should you do prior authorizations in a way that leads to approval and ultimately payment of the service that you are seeking prior authorization for?

3 Ways to streamline the prior authorization process

The first way that you can streamline the process of obtaining authorization in your practice is to make sure that your administrative procedures are clear, simple, and organized. If you are doing prior authorizations or if a member of your team is doing them, then you need to have all the documentation you need to properly submit a prior authorization request.

Likely, your administrative team does not have the clinical experience that you have. This means that you will need to be as clear as possible about the cases that need prior authorization. Additionally, your office staff will need to be disciplined when checking member eligibility and benefits.

A good tip is to have the workflow of the insurance company’s prior authorization process documented and available so that your administrative team is not reinventing the wheel every time they need to do an eligibility check.

The second way that you can streamline the process is to ask your client to call their insurance and check to see if they need prior authorization for the given service that you are going to administer. Oftentimes, the patient support teams at insurance companies are far more responsive than the provider support teams.

Asking your client to check to see if you need prior authorization adds another level of peace of mind and expectation setting for the client. It can be a good way to get the client involved in their own care and gives you another level of assurance about the accuracy of the information that you are given.

Finally, the last tip that would streamline the process of prior authorizations is by having a clear eligibility and benefit check procedure. By ensuring that the codes you are billing for require prior authorization or not is one of the best ways to clarify this process. This is an administrative procedure that is often overlooked but its importance cannot be overstated.

It is important to ensure that you have clarity around each and every one of your procedures. One of the best ways to gain clarity around administrative procedures is to outsource your billing to a company that has an out of the box procedural strategy that works, such as Practice Solutions. Feel free to reach out to us if you want to gain clarity around your procedures and advance your practice.


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