Importance of Preauthorization in Revenue Cycle Management
Preauthorization is an important part of revenue cycle management. This process ensures that you collect the needed funds before meeting with the patient to perform the service requested. It also provides one of many layered security measures.
When collecting payment, it’s important to follow up on any discrepancies and challenge incorrect charges. Another way preauthorization helps with revenue cycle management is by providing validation for insurance coverage. With this process, you can determine what services are covered under the patient’s policy, which will help avoid any discrepancies in billing or coding during post-service collection.
Here are some reasons why preauthorizations are an important part of your revenue cycle management strategy:.
Why preauthorization is an important part of revenue cycle management
Preauthorization is an important part of revenue cycle management. This is a process where the patient agrees to pay for services before they are rendered, which helps avoid situations where patients have no money or insurance and are unable to provide payment in full at the time-of-service delivery. In addition, preauthorization provides valuable information about a patient's ability to cover their medical expenses by providing insight into how much healthcare providers can expect from them during that specific visit.
How does preauthorization help with revenue cycle management?
To ensure that you collect the needed funds before meeting with the patient, preauthorization is an important revenue cycle management process. This process also provides one of many layered security measures.
When collecting payment, it’s important to follow up on any discrepancies and challenge incorrect charges. Another way preauthorization helps with revenue cycle management is by providing validation for insurance coverage.
With this process, you can determine what services are covered under the patient’s policy, which will help avoid any discrepancies in billing or coding during post-service collection.
Preauthorization is an important part of your revenue cycle management strategy because it provides validation for insurance coverage and helps you collect the needed funds before meeting with a patient to perform their requested service.
Why should you always follow up on discrepancies and challenge incorrect charges?
Accurate risk-based coding is a major component of revenue cycle management, and it ensures that you receive the reimbursement you deserve for the service performed.
Challenging incorrect charges is just one way that preauthorizations can help when collecting payment. You should also be aware of any discrepancies when collecting payments to ensure that you’re not short-changed.
If there are discrepancies in an insurance claim, it could take up to 45 days for the insurance company to respond with confirmation on what services are covered under their policy. By following up on these claims immediately, you can avoid any errors in billing or coding during post-service collection.
Why is it important for patients to provide all information at the time of preauthorization?
When a patient is denied from preauthorization, it is important that they provide all of their information and any questions they may have. The last thing you want to do is collect payment for services and then learn the patient was not eligible for the service.
If a patient does not provide all of their information, your office can be held liable for billing and coding errors on the service. If the patient's insurance company finds out that there were errors on your end, they will deny reimbursement. This will result in an unfavorable balance on your books and could affect your ability to bill other patients with similar insurance coverage.
Another reason why it's important to collect all of the necessary information at the time of preauthorization is so you know what services are covered by the patient’s health care plan. You may find out later that certain services are not covered or capped by insurance policies. Most payment plans typically cover up to 80 percent of your charges, but if you don't know what's covered under a particular policy, you might end up doing more work than needed or performing unnecessary treatments (with no chance for reimbursement).
What is another type of security measure that helps your revenue cycle management strategy?
Preauthorizations are an important security measure for revenue cycle management. They can prevent any discrepancies in billing or coding during post-service collection. It also provides validation for the patient’s insurance coverage, which will help avoid any potential discrepancies.
Another type of security measure that helps your revenue cycle management strategy is having agreements with your providers to only file claims electronically. This helps to prevent fraud and protect both you and the provider from paper-based errors.
Conclusion
In order to ensure the best revenue cycle management process possible, it is important to keep all authorizations and preauthorizations up-to-date. This way, you can capture more revenue and avoid discrepancies.
To get the most out of your preauthorization strategy, implement a few different types of preauthorizations, such as electronic preauthorization, call-in preauthorization, and written preauthorization. These will help you avoid billing patients for more than they owe and can even prevent fraud.
In addition to preauthorizations, make sure to utilize other security measures such as matching patient information on the preauthorization with the patient's insurance plan or requiring a signature on the agreement at the time of service.
Preauthorization allows you to focus on what’s best for your patients—and not on billing issues.
