Authorization & Benefits

As a medical billing professional, dealing with prior authorization is a necessary part of the job. Prior authorization (also known as preauthorization) is the process of getting an agreement from the payer to cover specific services before the service is performed. Normally, a payer that authorizes a service prior to an encounter assigns an authorization number that you need to include on the claim when you submit it for payment.

Get the correct CPT code beforehand

The key to a solid preauthorization is to provide the correct CPT code. The challenge is that you have to determine the correct procedural code before the service has been provided (and documented) — an often difficult task.

To determine the correct code, check with the physician to find out what she anticipates doing. Make sure you get all possible scenarios; otherwise, you run the risk that a procedure that was performed won’t be covered.

For example, if the doctor has scheduled a biopsy ( may not need prior authorization) but then actually excises a lesion (probably needs prior authorization), the claim for the excision will be denied. What’s a coder to do?

It’s better to authorize treatment not rendered than to be denied payment for no authorization. No penalty is incurred when a procedure has been authorized but is not completed, so err on the side of preauthorization.

In rare cases, the patient coverage is unavailable prior to an encounter. This scenario most often occurs in emergency situations, due to an accident or sudden illness that develops during the night or on weekends. When this happens, the servicing provider must contact the payer as soon as possible and secure the necessary authorizations.