Health insurance companies require prior authorization for the payment of services that are provided to patients. Similarly, in skilled nursing facility billing, prior authorization serves as an important contributor towards effective reimbursement and reduced claim denials. Even with all the other billing methods in place, claims for services requiring authorization may be denied or delayed if prior authorization requirements are not met. Thus, it is important for every skilled nursing facility to know the secrets of prior authorization, and how it can increase or decrease your revenue.
A step-by-step analysis of PA in skilled nursing facilities
Before discovering the secrets of prior authorization, let us understand how it functions in the billing process.
1) Patient identification:
Patients are referred to the SNF by physicians or doctors. The referral is initiated when the patient is discharged from a hospital and requires:
- Rehabilitation services
- Post-acute care recovery services
2) Coverage verification:
In this process, the SNF staff verifies the patient's insurance eligibility, benefit limits, and authorization requirements. They confirm whether the treatment or procedure is covered under the plan. The staff also verifies the documentation requirements for the medical service.
3) Authorization submission
The nursing facilities submit a request for prior authorization to the insurance company. The request includes detailed information about the patient’s medical condition, history, and the scheduled treatment plan. The only objective here is to establish medical necessity for nursing facility care. Authorization requests are submitted via payer portals, electronic data interchange (EDI) systems, and telephone channels.
4) Payer review:
The patient’s insurance company reviews the submitted request and may ask for additional information to make important decisions. The payer’s management team reviews the medical necessity, level of care, expected health outcomes, and alternative care settings. Based on the review, submitted claims could be approved, partially approved, denied, or request additional information.
5) Claim approval or denial
If the payer verifies that the treatment is necessary and covered under the plan, a prior authorization number or code is provided. This code is used by the skilled nursing facility staff for billing the service. If the request is denied, the provider may appeal the decision or furnish additional documentation to support the authorization request.
Even though the authorization process might appear to be simplified, the internal skilled nursing facility billing staff face many challenges in their way. These hindrances lead to errors in billing and further increase the rate of claim denials.
Hidden challenges of prior auth in SNF billing
1) Delayed patient admissions
There are many managed care plans that require authorization before the patients are admitted to long-term care facilities. Many SNFs perform manual authorization processes that result in significant treatment delays and affect patient care timelines. Delays also occur when clinical documentation is incomplete, absence of hospital discharge summaries, and repeated request of additional information. These often lead to extended stays at SNFs, delayed rehabilitation, and patient dissatisfaction.
2) Inadequate clinical documentation:
Human errors in medical billing are unavoidable, especially for the task of documentation. Some of the common documentation errors include:
- Missing physician notes
- Lack of nursing assessment details
- Incomplete therapy evaluations
- Lack of skilled service demonstration
3) Increased administrative burden:
The manual method of PA creates a burden on the clinic staff. The skilled nursing facilities often invest a significant amount of staff time for tracking authorization status, following up with payers, uploading documentation, and managing appeals. This shifts the focus of the staff from patient care to billing, which drains their energy and puts them under constant pressure. This is when outsourced companies come into place and help to shift the focus back to patient care for the SNF staff.
Key factors to remember before SNF billing outsourcing
Implementing the best practices of prior authorization is quite a challenging task for the in-house billing teams. In skilled nursing facilities, the staff are occupied with several tasks that cater to patient care and recovery. Managing tasks like documentation, coding, and claim submission is an additional burden on them. With the increase in third-party medical billing companies, providers now have the option to delegate the task to these professionals. The skilled nursing facility billing outsourcing companies come with a variety of benefits. Some of these include 100% same-day initiation of all PA requests, reauthorization with doctor’s office follow-up, up to 80% cost reduction, and a 99% overall accuracy rate. The outsourced firms have trained staff who are skilled at managing prior authorization along with other billing challenges. Their CPC-certified coders and dedicated account managers ensure accurate coding for proper reimbursement and compliance.
Additionally, skilled nursing facilities often have several queries and issues related to billing as well as patient appointments. This is taken care of by the billing companies since they provide virtual assistance support, covering appointment scheduling, patient inquiry response, and reminder set-up. The best thing about these skilled nursing facility billing solutions is their complete revenue cycle management services. It includes both pre-billing and post-billing tasks, that covers every corner of the reimbursement process. Additionally, there are some companies that offer other advantages like 30 days of free trial, HIPAA-HITECH compliant services, excellent client references, and all-inclusive pricing with no hidden costs. Most of the patients admitted to SNFs require long-term care, which comes down to a detailed and extended billing process. Hiring the right partner is a crucial step towards improved prior authorization and streamlined reimbursement. Contact the experts now and witness an unwavering financial growth and patient care improvement.
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