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How to Avoid Claim Denials Related to Prior Authorization

January 1, 2019

Patient pre-authorization

Failing to obtain prior authorization before the service is performed can result in a claim denial. In most cases, services requiring authorization before service include high-cost ancillary services, surgical procedures, or services that may be considered unnecessary in certain circumstances. 

Unfortunately, the need for prior authorization often results in delays in necessary health care, which can affect not only patient satisfaction but also patient outcomes. One survey conducted by the AMA found that physicians and staff members spend an average of two business days a week dealing with the prior authorizations workload. Although the AMA continues to urge payers to reform their requirements for prior authorizations, today it’s essential for your practice to know how to efficiently handle authorizations for the sake of your patients and your practice revenue. 

Even if your practice works hard to deal with prior authorizations effectively, sometimes claims still get denied for a variety of reasons. Here’s a closer look at some of the most common reasons for prior authorization denials and the steps you can take to prevent denials to keep your practice revenue flowing. 

Reason #1 – Failure to Include the Prior Authorization Number on a Claim 

In many cases, claims are processed with an automated system, so if there isn’t a prior authorization number on the claim, it could raise a red flag that results in the system denying the claim. If the payer doesn’t do a manual check, they may not have realized that you actually did receive prior authorization. 

It’s usually easy to prevent these denials. Simply take time to double-check to ensure that you’ve included the prior authorization number clearly on the claim. It’s an easy fix that can save your practice both time and money. 

Reason #2 – Only a Prior of the Claim Received Prior Authorization 

A claim may be denied because only one service on the claim received prior authorization. Once again, this is also relatively easy to prevent. It’s important that billing and coding staff pays attention to all services listed on a claim. Billing and coding staff need to work together with providers to ensure they know which services require prior authorization and to ensure that all authorizations have been obtained before services are performed. 

Reason #3 – Unable to Get Prior Authorization Before the Treatment

Sometimes it’s impossible to get a prior authorization before treating a patient, particularly if a patient is seen on an emergency basis and you don’t have time to obtain the prior authorization. You’ll generally find that payers may be flexible if you were dealing with an emergency. However, they usually don’t show much flexibility for non-emergency care. 

Reason #4 – The Claim Wasn’t Processed Correctly by the Payer

It’s possible that a claim is denied simply because it wasn’t processed correctly by the payer. If you received a denial that’s unexplained, it’s essential to have staff who can take the time to contact the payer to identify why the claim was denied and whether that reason is warranted. When this occurs, work with the problem on the phone with the payer’s rep so you’re able to identify the problem and avoid any errors in the future. 

Remember that Prior Authorization Doesn’t Guarantee Payment

Even when you take measures to obtain prior authorization before performing a service, remember that it’s still not a guarantee that they’ll pay. When you submit the claim, you will still need to make sure that the service is supported with medical necessity, the claim is filed within the filing requirements of the payer, and the prior authorization number is included when you send in the claim. 

Prior authorizations can be frustrating for your practice to navigate, and they’re a common cause of claims denials. Never be afraid to appeal when a payer denies a claim. While it’s time consuming to contact payers to discuss denials, it’s very effective in changing the outcomes of your claims. Outsourcing your billing and coding is another option to consider. Expert billing and coding companies specialize in managing claims denials and working to prevent denials in the future so your practice sees improvements in practice revenue. 

If you’re ready to reduce claims denials and improve revenue, M-Scribe can help. We specialize in medical billing and coding, and we can customize a solution that fits the unique needs of your practice. Contact M-Scribe today to learn more about our medical billing and coding services.


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