Importance of Prior Authorization in Medical Billing - Medical Coding Jobs and Career

Sunday, April 18, 2021

Importance of Prior Authorization in Medical Billing

 Importance of Prior Authorization in Medical Billing

Prior authorization is the process of obtaining approval in advance of a planned inpatient admission or rendering of an outpatient service. Insurance Company will make an authorization decision based on the clinical information provided in the request. Insurance company may request additional information that may include a medical record review.

Prior Authorization
Importance of Prior Authorization in Medical Billing

Reasons for requiring authorization may include:

  1. Review for medical necessity
  2. Appropriateness of rendering provider
  3. Appropriateness of setting
  4. Case and disease management considerations

Prior Authorization is required for elective or non-urgent services as designated by Insurance. Guidelines for prior authorization requirements by service type and/ or code are available by calling Insurance company, or by referring to the Benefit Grid found in the Providers area of the concerned insurance company’s website .

The prior authorization request should include the patient’s diagnosis (ICD-9), and the CPT code describing the anticipated procedure. If the procedure performed and billed is different from that on the request, but within the same family of services, a revised authorization is not required.

The attending physician or designee is responsible for obtaining the prior authorization for the elective or non-urgent procedure or admission.

An authorization is the approval necessary to be granted payment for covered services and is provided only after Prestige Health Choice agrees the treatment is necessary and a covered benefit.

An Authorization Request form must be completed by the provider in order to obtain an authorization from Insurance Company. A copy of this form is included in the Forms section of the manual. This form must be filled out completely and legibly in order to be processed quickly.

A current and operating fax number with area code must be included in order to receive an authorization number by return fax.

Providers may request a “stat” authorization (for services that are urgent in nature) by:

Calling Insurance Company (have the member’s name, ID number, diagnosis and service available when calling). 

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