Prior authorization is the requirement to obtain prior approval for the reimbursement of medical services, procedures, tests and specialist appointments. An increase in prior authorization requirements in radiation therapy is placing administrative and financial burdens on many radiation oncology practices throughout the United States. Some basics that radiation oncology providers should know include:
Utilization Management Companies Have a Financial Incentive to Deny Claims. Payers hire utilization management companies to screen claims and generally analyze these contracts on an annual basis to evaluate approvals vs. denials. If the utilization management screenings are simply approving most of the prior authorization requests, the payers will reevaluate the need for the program. Consequently, there is a strong financial incentive for the utilization management firms to deny a portion of the prior authorization requests. Providers that have excellent processes for receiving prior authorization are less likely to receive the denials than those that submit incomplete or erroneous requests.
There Are No Standards for Requesting Radiation Therapy Prior Authorizations. Although substantial progress has been made on Electronic Prior Authorizations (ePA) for certain medications and even some specialties, radiation therapy is still subject to the manual processes and policies of numerous payers. The guidelines are not well defined. It’s important for payers to make medical necessity guidelines as clear and concise as possible, and also easily accessible to providers and patients. Payers should base these policies on sound clinical evidence and make that evidence available when providers ask for rationale. However, many payers have developed their own set of guidelines for clinical necessity. Although the guidelines for each payer may be perfectly reasonable, it’s incredibly hard for a provider or staff member to know all the clinical guideline variations among the many payers they accept.
Costs of Managing Prior Authorizations are Growing Substantially. To handle the additional workload of prior authorization tasks, radiation oncology practices must either hire more staff or assign the prior authorization duties to their existing and already overburdened physicians, nurses and clerical staff. Either approach can be costly to the practice. In a recent study by Casalino and colleagues, physicians reported spending three hours weekly interacting with insurance plans, with additional time spent by nurses, medical assistants, and clerical staff. When time was converted to dollars, Casalino estimated that the national cost to practices of interactions with health plans is at least $23 billion to $31 billion each year.
Well defined policies and procedures for prompt and proactive eligibility verification and authorization, along with substantial training for any staff designated to fill the prior authorization role is a requirement in this environment. It’s important to understand the real-time requirements of the insurance companies or find a revenue cycle management partner who can combine expert resources with robust processes to minimize costs and delays.
