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Appealing a Claim Denied Due to Lack of Authorization

Feb 4, 2012
online marketingWhen it comes to navigating the managed care world, the system can be streamlined, efficient and profitable as long as the proper procedures are followed. However, when it comes to authorization for services rendered outside of the primary care physician’s (PCP) office, these procedures must be followed precisely otherwise an office runs the risk of denial of claims. The basic premise of managed care (and HMOs in particular) is that all services outside of the PCP office require both the direction of the PCP and an official authorization. This is done primarily for cost containment purposes, as most of these plans operate within a capitation based system. If you are working for a specialty physician that participates in managed care plans, keeping a tight rein on the authorization process is certainly the rule of the day. The best defense, of course, is a good offense. This means that the office staff should make absolutely certain at the time the appointment is made that there is a valid authorization in place. In addition to simply querying the patient about the existence of an authorization, be sure to also clarify:
  • What is included in the authorization (e.g., just a consultation versus consultation plus lab work)
  • That your physician name is on the authorization
  • The expiration date of the authorization
  • The number of visits covered by the authorization
If it appears that everything is in place, you should feel comfortable with seeing the patient.  At the time of the appointment, be sure to get a copy of the authorization and file in the patient’s chart. While you have done everything you can on the front end, it is still possible that the claim may get denied. If this happens it will be well worth your time to initiate the appeal process. First, try to resubmit your claim on paper with an actual copy of the authorization. When doing so, make that you send it to the proper street address or PO box for the payor and not simply a general mailbox. If the claim gets denied after the first paper submission, then you will need to appeal directly to the payor via more formal means. If you are working with an HMO medical group, you may also want to get their Provider Relations Department involved at this stage as well. Craft a detailed letter explaining why you feel that your claim should not be denied. Include the fact that you did have an authorization in place, but also reaffirm the medical necessity of the visit. You may also find it helpful to get in touch with the ordering PCP and have them confirm that your visit was, in fact, authorized. A short note from the PCP should help to make your case. Once you start the appeal process, be sure to stay on top of the situation. If there have been no word from the payor after fourteen days, resend your correspondence. As a last ditch effort, you can also involve your patient in the process and ask that they appeal directly to the plan on your behalf. Most health insurance plans do not want unhappy consumers and this may very well push the process in your favor.