Authorizations are a leading cause of denials and claim loss in ASCs. According to a recent study conducted by Beckers, 81% of providers polled report an increase in payer’s authorization requirements since 2020. https://www.beckersasc.com/asc-coding-billing-and-collections/prior-authorization-red-tape-worse-than-last-year-81-of-medical-groups-say.html?utm_campaign=asc&utm_source=website&utm_content=latestarticles

ASCs commonly rely on the referring physician practice to obtain authorizations for scheduled surgical procedures. This may not be ideal for the future of ASCs.

First, let us go over the issues within:

  1. Authorizations and referrals must be obtained from the insurance company in advance of rendering a service however, this does not always happen. When this is not done, your chance of not getting paid is very high! Payors will not pay for services that require authorization and are not authorized. Very few payors have allowances for obtaining retroactive authorizations, for instance Humana HMO may allow 2 weeks, while UHC and BCBS allow 2-3 days. Are you willing to take the risk of not being paid due to services not being authorized?
  2. More and more payors are wanting 100% accuracy in authorized codes. When obtaining authorization for surgical procedures, the exact codes that occur in surgery and appear on the final billed claim do not always line up with the scheduled codes.
  3. Who is responsible for obtaining and verifying necessary referrals and authorizations? In history, the ordering Physicians’ office is responsible for obtaining referrals and authorizations for patients going to outside facilities for tests, exams, and surgery or procedure services. At times, payors will require a separate authorization for the Physician and Facility, or authorization is required for the Facility and not the Physician. This is a common occurrence contributing to payment loss in ASCs when the Physician’s office does not take the steps to check the Facility’s TIN and the Facility does not verify the authorization results provided by the Physician’s office.  

Keys to improvement

  1. Track and trend this issue. Is this a specific provider office, payor, or service contributing to authorization denials?
  2. Make someone accountable for ensuring services are authorized.
  3. Develop a policy with guidelines to follow including what to do when the guidelines are not met.
  4. Decide on the actions to take when authorization is not received on time.
  5. Consider rescheduling allowing time for the authorization to be approved.
  6. Inform the patient and let the patient decide to reschedule or sign an advanced notice of financial responsibility in the event of insurance denial. Most patients will choose to reschedule so their insurance pays the claim.
  7. Work with the insurance and provider’s office to obtain the authorization or consider managing authorizations at the facility. While this is not ideal, you cannot do surgery for free.
  8. Where scheduled versus performed CPT codes are an issue, this is usually happening with a specific payor. Authorizing all possible codes that can occur during the scheduled surgery is the best solution when this is an issue.