If your insurance company already implements pre-authorization processes on all automobile no-fault and workers’ compensation claims, you likely understand how it can significantly impact the bottom line. However, if you are an adjuster or examiner working for an insurance company that currently does not utilize pre-authorization processes on all claims, you could be leaving dollars on the table. There are four important ways that the implementation of a pre-authorization process will impact the bottom line for your insurance company.
Injury Relatedness Verification
To begin, the most immediate impact of a pre-authorization process relates to the question of injury relatedness. When an insurance company does not have this process in place, they are much more likely to pay too much money for unrelated services that are prescribed to claimants. For instance, when a claimant is already taking a prescription medicine before their claim-related injury and the dosage is increased after the claim, it can be difficult for adjusters and examiners to determine what portion of the prescription is related to the claim. Once a pre-authorization process is in place, these types of complex situations will be reviewed to ensure the insurance company will only pay for the appropriate portion of the claimant’s prescription instead of unnecessarily paying for the entire cost of the medicine.
Elimination of Out-of-Pocket Costs
When physician prescriptions are reviewed under the pre-authorization process to ensure that services are directly injury related, both the insurance company and the claimant benefit. For instance, the insurance company will experience a decrease in claims costs and the claimants will no longer need to pay out-of-pocket for their medications or services that are directly related to their claim. This elimination of out-of-pocket costs greatly increases claimant satisfaction levels, further impacting the bottom line.
Bundling Services
Third, a pre-authorization process will address the practice of unbundling services. Some providers deliberately unbundle services to receive a larger payment from the insurance company which drives up claims costs. For example, a rental wheelchair includes components (e.g., footrests, armrests, footplates) that a provider might otherwise unbundle since procedure codes are available for individual components. Additionally, unbundling increases claim lines and therefore generates more paperwork for adjusters and examiners that reduces their efficiency. Services should always be bundled when appropriate which contributes to a reduction of claims costs and a lift in adjuster and examiner productivity and efficiency.
Procedure Code Usage
Finally, part of having a successful and impactful pre-authorization process means addressing the complex topic of the Healthcare Common Procedure Codes (HCPCS) system and the use of not otherwise classified (NOC) codes. Improper usage of procedure codes and NOC codes results in higher costs to the insurance company. Having a pre-authorization process in place allows for a review of procedure codes and, when appropriate, the correction and bundling of codes to more accurately reflect the provided service.
Northwood is a trusted TPA that works hard to implement pre-authorization processes for their clients. Ensuring these systems are in place requires extra time and effort and Northwood is happy to go above and beyond to save dollars for insurance companies. For additional information about how Northwood can help impact your bottom line, please schedule a meeting with Rosanne Brugnoni at 586-755-3830 ext. 3771.
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