Are you protecting your accounts receivable by understanding the differences
between precerts, authorizations, and referrals? Are you taking the
necessary steps to safeguard this information up front during the
registration period? Are you protecting your receivables on the back
end by resolving precert, authorization, and referral issues in the
most cash efficient manner? With managed care on the rise, these are
vital concerns to be aware of for your continued cash flow.
I've been in dozens of facilities doing consulting work over the
past 12 years and have found every facility writing off thousands
of dollars on managed care adjustments revolving around precerts,
authorizations, and referrals. Healthcare facilities usually do
their due diligence on inpatient stays but then neglect the outpatient
visits. The dollar value of the accounts may only be, lets say $250
on average, however this means $250,000 after 1000 visits and $2,500,000
after 10,000 visits. It adds up quickly! Here are a few tips that
may help you:
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Precerts and authorizations are obtained
from your managed care company prior to providing services
to the patient, or within 72 hours in certain cases.
This process allows the insurance company to control
(or manage) the type of care the patient is about to
receive. Don't be fooled by obtaining an authorization
for outpatient services that turns into an inpatient
stay, and vise versa. You won't be covered and could
sustain severe financial penalties. If you have a change
in the type of stay, call again for a new authorization
number. You must also remember that authorizations for
a 2-day stay, for example, require recertification if
the length of stay is extended.
Referrals are required from your Primary
Care Physician (PCP) in order to be treated by any other
specialty physician. Now, just because the PCP referred
a patient to Dr. X, who is not participating in the
managed care group, does not mean that the referral
will secure your payment for services. Non-participating
is still non-participating no matter who refers the
patient. Another caution is that a referral from the
PCP does not exclude the necessity to still obtain an
authorization for services from the specialty physician.
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So now what do you do if these items are missing from your medical
file? You do have choices but the end results will depend on the
managed care company and how each contract was written.
• If you are missing a referral, call the PCP for one immediately.
Have them fax it to you as well as the managed care company. I have
found that some carriers require that the PCP submit the referrals
as well as the provider of service. Some of your denials may only
be waiting for the PCP's referral submission.
• Call the physician's office to verify if they have an authorization
number on file. You may be able to use that as well.
• Find out if the physician received payment. If they did
and you did not, ask the carrier for an explanation why.
• Appeal your denial by submitting medical records to justify
services rendered. You may not get full reimbursement but you may
not lose your entire expected reimbursement.
Of course, the best defense is your offense. Do it up front and
as early as possible. Good luck!
Carol E. Cappello, CPAM
RPM Receivable Process Management, LLC
Vice President of Client Services
Ccappello@rpm-cash.com
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