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Proving Payer Preauthorization

Philip Betbeze, for HealthLeaders Media, October 13, 2010
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Health First of Rockledge, FL, like many providers, found itself playing a familiar he-said, she-said, cat-and-mouse game with insurers, says Jim Slate, vice president of revenue operations for the health system.

“They would give us preauthorization to perform a procedure for a patient and they denied the claim later, saying we didn’t get the authorization,” he says. “We did, but it might have been a phone conversation and we couldn’t prove it. We had that happen many different times.”

Clearly, they needed a solution that would prove that prior authorization had been given, because while denials weren’t going to drive Health First out of business, they were putting a significant dent in revenue, as Health First’s denials were equivalent to about 0.3% of a gross of $1.5 billion annual revenue.

“That ran us in the range of $4 million to $5 million a year,” says Slate, “plus the cost to collect involved when you appeal, including time on the back end, and you have to produce medical records, which meant a lot of unnecessary work. Even if you do get it overturned, there’s additional cost involved.”

Health First needed an efficient way to track and archive those phone and fax communications so that insurance companies couldn’t hold their own disorganization against the hospital. It picked Trace, a searchable, Web-based program from The White Stone Group in Knoxville, TN, that logs and tracks phone calls and faxes much as how Microsoft’s Outlook catalogs e-mails.

Game over.

Michelle Fox, director of revenue operations/patient access, says some insurers played this game cynically, meaning they knew the hospital didn’t have a record of the communication that authorized the service, so they knew they could get away with not paying.

“This really cut the feet right out from underneath the managed care folks who didn’t want to work with us,” she says. “Once you’ve established that integrity in communications, the customer knows that, so there’s no more game playing. You don’t have to do the battles, and they can’t deceive you through miscommunication.”  

But collections weren’t all that the new tracking system improved.

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1 comments on "Proving Payer Preauthorization"


Jill R (10/26/2010 at 11:35 AM)
What a bunch of baloney and total waste of money. Before coming to the Insurance side I worked 30+ yrs on the Provider side and NEVER have I encountered such an issue. Common sense dictates and the 1st rule of thumb tells us that "if it's not on paper, it never happened". The fact that your prior auth staff never bothered to get written confirmation is your bad; a sign of poor internal processes and mismanaged workflows. Now you are spending additional $$ on a product to trace phone calls/activity? Ludicrous. Email me if you want some FREE advice on how to run an effective Revenue Cycle Program. For the record, I have not switched sides, I'm still very PRO Hospital but it seems to me that the so-called "disorganization" is on your part, not the Payer's.