You don’t know if the third-party payer will cover treatment and some third-party payers require pre-authorization.
Get pre-authorization for treatment to verify what will be covered and to ensure that you are following the payer’s requirements for reimbursement.
The Counseling Center in Portsmouth, Ohio increased insurance reimbursements from 8% in January to 32% in April. They adopted a new detailed pre-authorization form and created a spreadsheet to track all authorizations. They also listed pre-authorization numbers on the Health Insurance Claim Form (HCFA). A person other than the preparer reviewed the HCFAs to ensure accuracy and completeness. They documented all claims activity (list of claims sent and responses received) on a worksheet for analysis and reporting.
Liberty Center Connections, Inc. in Wooster, Ohio decreased the claim error rate from 33% to 16% and increased insurance reimbursements from 10% to 17% of total charges. An understanding of contract stipulations allowed them to follow more efficient procedures to obtain the authorizations in advance and to ensure that they met requirements. They created a list of insurance providers and the credentials required for reimbursement of services provided. They also created a checklist with information needed to collect from insurance companies when calling to verify coverage.
- Verify coverage.
- Get pre-authorization.
- Establish medical necessity.
- Follow contract stipulations.
- Track when re-authorization is needed.
|Cycle Measure||Data Collection Form|
|Percentage of clients with pre-authorizations||None|
|Denial Rate = Total Number of Denied Claims/Total Number of Claims Submitted||None|
|$ of revenue from client co-pays||Revenue by Payer Worksheet|
Meta House in Milwaukee, Wisconsin created a better tool to notify clinicians about county re-authorization due dates, resulting in a decrease in late re-authorizations from 60% to 53%. They adapted their spreadsheet so that re-authorization due dates are calculated automatically. This is part of the new billing system they have created that includes referral, authorization, admission, re-authorization, and successful billing, to eliminate unauthorized treatment.
Muskingum Behavioral Health in Zanesville, Ohio increased the number of clients with third-party payers from zero to 10, and increased third-party revenue by approximately $1000/month. They contact third parties in advance of billing to get pre-authorization.