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    If you were to ask the average claimant whether he or she knows and understands the pre-authorization process, they would likely say no. But within nearly every automobile no-fault and workers’ compensation claim administered by your insurance company, pre-authorization should be a process that is implemented. Not only can doing so save your insurance company significant money every year but pre-authorization can greatly affect your claimants in both direct and indirect ways.  


    The most obvious and direct way that the pre-authorization process affects your claimants pertains to the fact that there will be no out-of-pocket expenses on any administered claim. This may seem as though it’s a broad statement to make but partnering with a third-party administrator (TPA) on claims will ensure that all physician prescribed services will not require your claimant to pay any of their own money. This is due to the thorough work the TPA does behind the scenes to make absolutely sure that every prescription medication or service is related directly to the claim. 


    The elimination of out-of-pocket cost therefore ties in with the verification of injury relatedness. If your insurance company partners with a TPA, the TPA should be reviewing every physician prescribed service within a claim to make sure the service is necessary for indemnification of the claimant. Once the service has been reviewed and verified as injury related, the claimant may pick up his or her prescription with no need to pay up front. If, however, the TPA determines that a prescribed service is unrelated to the claim then the service will not be approved for payment. This behind the scenes work saves your insurance company money and translates to an easy and convenient process for claimants.  


    Perhaps one of the more indirect ways that pre-authorization of physician prescribed services can impact your claimant involves the Healthcare Common Procedure Codes System (HCPCS). Some providers may improperly utilize these HCPCS codes which drives up the cost of the claim. Northwood is an experienced TPA and has observed that the improper use of not otherwise classified (NOC) codes in particular can and does increase costs. There is almost always a correct HCPCS code to use on every physician prescribed service and Northwood takes care to apply the codes appropriately and reduce unnecessary expenses to your insurance company.   


    The use of HCPCS codes can also lead to the costly practice of unbundling. Some providers choose to unbundle related services to receive a bigger payment from your insurance company which further increases costs to your company unnecessarily. Northwood reviews the HCPCS codes for each claim to ensure that services are bundled appropriately which contributes to reduced claims costs overall.  


    These details illustrate the impact that implementing a pre-authorization process can have on your claimants. All of the instances mentioned further combine to contribute to increased claimant satisfaction scores as well. When a claimant experiences flawless service and when an insurance company strives to eliminate unnecessary costs, that can add up over time to higher satisfaction with your insurance company. For a deeper look at how pre-authorization impacts your claimants, please schedule a meeting with Rosanne Brugnoni at 586-755-3830 ext. 3771. 


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