What is Preauthorization

What does "preauthorization" mean?

Preauthorization, sometimes referred to as "pre-certification," is the process used to confirm if a proposed service or procedure is medically necessary. Whenever possible, preauthorization should occur before treatment is received. 

The physician who schedules an admission or orders the procedure or service is responsible for obtaining preauthorization. Providers should contact the Provider Authorization number on the back of the health plan ID card to confirm if preauthorization is required. 

You may also contact Customer Service at the number on the back of your health plan ID card to determine if a proposed test, equipment, service, or procedure requires preauthorization. 

It is important to know if your provider has obtained preauthorization, particularly when visiting an out-of-network provider who may or may not be familiar with your Insurance

WHEN YOU DON’T GET THE NECESSARY PREAUTHORIZATION

Who gets stuck with footing the bill when preauthorizations don’t pan out? It depends. The determination as to who is responsible is often defined by the patient’s insurance plan.

If the plan benefits outline specific services that are not covered and the patient seeks those services, the responsibility for payment falls to the patient. If a provider fails to authorize treatment prior to providing services to a patient and payment is denied by the insurance company, then the provider may be obligated to absorb the cost of treatment, and no payment is due from the patient.

Some payers may assign full financial responsibility for a procedure that didn’t get the necessary preauthorization to the patient.

In this case, the provider has to make a decision about whether to pursue collecting the payment from the patient. Some swallow the loss. Others send the unpaid bill to the patient, but doing so is bad business. Patients are both unaware of the process and not in any sort of position to guess what CPT code should be submitted to the insurance company.

Many Predict ICD-10 will Drive the Demise of the Paper Superbill

The simplicity of the traditional superbill — which allows providers to check off the most common ICD-9 codes quickly on one sheet of paper — gets more complicated quickly with ICD-10 codes. One estimate reported by Government Health IT is ICD-10 code specificity could take almost 5 times more space on a page – meaning the front and back of a paper superbill becomes 9 – 10 pages after October 1st. This complexity alone might prompt many practices to drop their paper superbills.

Paper Extinction?

Other experts are convinced — expecting that ICD-10 will drive all practices still using paper to switch to an EHR system and electronic superbills. “The paper superbill is one of the most productive and widely adopted tools in medical practices in the past 30 years…and it will become extinct on October 1, 2015.”

“It’s no surprise that electronic superbills are something to be excited about,” says Linda Martien, CPC, CPC-H, CPMA. In her post for the American Academy of Coding Professionals, she argues that electronic superbills reduce a lot of the human error inherent in paper forms. Coding becomes more accurate, she adds, because electronic superbills are designed to save money, time and labor for medical groups.

More Efficient = More Revenue?

A remaining question is: Will paperless superbills mean more money for you? It’s no surprise that coding and EHRs make sense together – proper coding with an EHR means a proper superbill.

EHR templates and superbills provide the platform necessary for the daily use of codes, so it’s important they’re properly implemented for EHR coding to function properly. And being able to indicate the services you’ve provided quickly and efficiently with electronic superbills inevitably translates to financial gain.

And speaking of financial gain, automating charge capture via your EHR leads to more accurate, higher levels of E&M coding. Your EHR may automatically suggest codes at the time of the patient encounter, based upon the content present in the physician’s patient progress note. No more worrying about undercharging as a result of unclear or unnecessarily confusing superbills.

And with ICD-10 code descriptions sometimes taking up significant space on a standard letter-sized form, printing fractions of superbills will be tedious and time-consuming. Multiple page encounter forms are impractical and costly, leading some to believe ICD-10 will make the superbill obsolete. But for most, the logical choice lies in converting to an EHR.

Part 1: The Differences Between ICD-9 and ICD-10 - Source AMA [American Medical Association]

Alert: The new ICD-10 compliance date is October 1, 2015.

The ICD-10 code sets are not a simple update of the ICD-9 code set. The ICD-10 code sets have fundamental changes in structure and concepts that make them very different from ICD-9. Because of these differences, it is important to develop a preliminary understanding of the changes from ICD-9 to ICD-10. 

Issues today with the ICD-9 diagnosis and procedure code sets are addressed in ICD-10. One concern today with ICD-9 is the lack of specificity of the information conveyed in the codes. For example, if a patient is seen for treatment of a burn on the right arm, the ICD-9 diagnosis code does not distinguish that the burn is on the right arm. If the patient is seen a few weeks later for another burn on the left arm, the same ICD-9 diagnosis code would be reported. Additional documentation would likely be required for a claim for the treatment to explain that the burn treated at this time is a different burn from the one that was treated previously. In the ICD-10 diagnosis code set, characters in the code identify right versus left, initial encounter versus subsequent encounter, and other clinical information.

Another issue with ICD-9 is that some chapters are full and impede the ability to add new codes. In some cases, new codes have been assigned to different chapters making it difficult to locate all available codes. ICD-10 codes have increased character length, which greatly expands the number of codes that are available for use. With more available codes, it is less likely that chapters will run out of codes in the future.

Other issues that are addressed in ICD-10 include the use of full code titles and appropriately reflecting advances in medical knowledge and technology. More detailed information and examples are provided below to demonstrate the differences between the ICD-9 and ICD-10 code sets.

What is ICD?

ICD means International Statistical Classifications of Diseases. ICD codes are alphanumeric designations given to every diagnosis, description of symptoms and cause of death attributed to human beings. These classifications are developed, monitored and copyrighted by the World Health Organization (WHO). In the United States, the NCHS (National Center for Health Statistics), part of CMS (Centers for Medicare and Medicaid Services) oversees all changes and modifications to the ICD codes, in cooperation with WHO

What Do the Numbers Mean? ICD-09, ICD-10 and Others

 ICD codes were first developed in 1893 in France by a physician, Jacques Bertillion. They were called the Bertillon Classification of Causes of Death. In 1898, they were adopted in the United States, and were considered, in effect, ICD-1 because that was the first version of code numbers. Most of the codes we see in the United States today are version 9, called ICD-9-CM codes. With few exceptions, the paperwork we receive when we leave a doctors office will contain both CPT codes (Current Procedural Terminology) to describe the service that was rendered for billing purposes, and ICD-9-CM codes to describe why that service was provided. Further, most death certificates filed since 1977 will have an ICD-9 code on them.

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Healthcare Billing Cycle

The medical billing process in simple words can be described as interaction between health care provider (doctor, nurse, hospital, etc.,) and the insurance company (payer). This process is termed as billing cycle.

The cycle starts when a patient meets the Doctor.. Lets understand the details of each of the steps in the process:

Roles and Responsibilities: