Preauthorization, also known as prior authorization, prior approval, or precertification, is the decision made by an individual’s health insurance carrier to allow a patient to receive a health care service, treatment plan, prescription drug, or medical equipment if deemed medically necessary.[1]Requesting preauthorization from an insurance carrier results in either authorization or adverse determination. Arizona Revised Statues Title 20-3401 defines authorization as a health care service that satisfies a health care service plan’s requirement for medical necessity and that payment under the plan will be made for the service, whereas adverse determination is the denied coverage for a health care service that fails to meet the criteria of medical necessity.[2] Understanding the types of procedures which require preauthorization and the legislation that has streamlined the preauthorization application process allows healthcare providers to communicate treatment plans more effectively with their patients, which increases patient satisfaction and benefits medical practices.
Public and private medical insurance carriers require prior authorization for the prescription of medications that may be unsafe when combined with other medications, when other lower-cost but equally effective alternatives to medical treatments are available, for drugs that are used primarily for cosmetic purposes, for medical treatments or medications that are often misused or abused, and for medical treatments and medications that should only be used to treat certain medical conditions.[3] An incentive private insurance carriers offer their enrollees for utilizing in-network providers is completion of prior authorization, when necessary, by their healthcare provider, whereas enrollees who visit out-of-network providers are responsible for obtaining their own prior authorization.[4] The Arizona Health Care Cost Containment System (AHCCCS) has an extensive list of covered services for enrollees in the Title XIX category for enrollees who are nineteen years old or older, and the Title XXI category, which includes individuals younger than nineteen years old.[5] Services which do not require preauthorization in Arizona include emergency medical hospitalization, diagnostic procedures such as EKG’s, MRI’s, CT Scans, X-rays, Labs, sleep studies, cardiac catheterization, non-surgical procedures such as PICC Line/Central Line removal or placement, blood transfusions, emergency dental services, eye glasses, family planning services, physician consultations and office visits, prenatal care, emergency transportation, and non-emergency transportation less than one hundred miles.[6] However, in Arizona services which require prior authorization are non-emergency acute inpatient hospital admissions, elective surgeries or hospitalizations, non-emergency transportation greater than one hundred miles distance, consumable medical supplies greater than one hundred dollars in value, and admission to a level one behavioral health residential facility, hospice, or other skilled nursing facility.[7] While preauthorization for specific medical procedures and services has largely remained the same, recent changes in legislation have altered the prior authorization application process.
The goal of standardizing Arizona’s prior authorization was to revise the burdensome preauthorization process that has been impeding Arizonans from receiving medical care.[8] Before deciding on revisions to the preauthorization application process, the Arizona Department of Insurance and Financial Institutions (DIFI) sought input from stakeholders and evaluated forms that have already been successfully used for preauthorization requests in other states.[9] Consequently, following the enactment of HB2621, effective January 1, 2022, the DIFI implemented the Substantive Policy Statement with the intent of disseminating uniform prior authorization request forms and improving regulatory guidance around Arizona’s preauthorization legal requirements among insurers, medical providers, and utilization review agents.[10] The criteria for the updated preauthorization form are outlined in Arizona Revised Statues Title 20-3403, which highlights that a health care service’s plan or utilization review agent will make providers aware of all procedures requiring prior authorization and the request documentation providers must complete. Additionally, a secure electronic submission is the only means by which a utilization review agent will accept prior authorization requests, exceptions being providers with limited or no internet connectivity due to geographic location or if electronic submission would create financial hardship for the provider.[11] Revisions to preauthorization requests have limited documentation excluding provider’s notes to two pages in total length, a correction that was made to reduce determination turnaround time.
While receiving authorization for a medication, medical service, or medical equipment does not guarantee that a public or private insurance carrier will make the full requested payment, it does increase both the provider’s and payee’s awareness about coverage for a specific treatment. Uncertainty in medical billing, or a payee being told they would be responsible for a certain amount and then being told at a later date that they are responsible for a greater amount, has traditionally been a significant issue patients have with medical practices.[12] Although the updated prior authorization process is still improving, the intent of the update was to increase both payee and provider education around procedures that are not directly covered under their medical insurance, which helps eliminate undue provider-patient stress.
Citations:
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Preauthorization. HealthCare.gov. (n.d.). Retrieved November 25, 2022, from https://www.healthcare.gov/glossary/preauthorization/
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Arizona legislature 20-3401. Arizona Legislature. (2022). Retrieved November 25, 2022, from https://www.azleg.gov/viewdocument/?docName=https%3A%2F%2Fwww.azleg.gov%2Fars%2F20%2F03401.htm
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What is prior authorization? Cigna. (2022). Retrieved November 25, 2022, from https://www.cigna.com/knowledge-center/what-is-prior-authorization
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Ibid
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AHCCCS Medical Policy Manual CHAPTER 300 - EXHIBIT 300-1 AHCCCS COVERED SERVICES WITH SPECIAL CIRCUMSTANCES. Azahcccs.gov. (n.d.). Retrieved November 25, 2022, from https://www.azahcccs.gov/shared/Downloads/MedicalPolicyManual/300/Exhibit300-1.pdf
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PA requirements. AHCCCS.gov. (n.d.). Retrieved November 25, 2022, from https://www.azahcccs.gov/PlansProviders/FeeForServiceHealthPlans/PriorAuthorization/requirements.html
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Ibid
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Roundup: APTA 2022 legislation roundup: Prior authorization reforms, telehealth, and more. APTA. (2022, August 26). Retrieved November 25, 2022, from https://www.apta.org/article/2022/08/26/state-legislation-roundup
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Daniels, E. (2022, January 3). REGULATORY BULLETIN 2022-01(INS). difi.az.gov. Retrieved November 25, 2022, from https://difi.az.gov/sites/default/files/Prior%20Authorization%20Bulletin%20with%20forms%202022-01.pdf
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HB 2621: prior authorization; uniform request forms. azleg.gov. (n.d.). Retrieved November 25, 2022, from https://www.azleg.gov/legtext/55leg/1R/summary/H.HB2621_012721_HHS.DOCX.htm
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Arizona legislature 20-3403. azleg.gov. (2022). Retrieved November 25, 2022, from https://www.azleg.gov/viewdocument/?docName=https%3A%2F%2Fwww.azleg.gov%2Fars%2F20%2F03403.htm
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Kylander, K. (2022, July 15). The top 10 medical billing issues. CollaborateMD. Retrieved November 25, 2022, from https://www.collaboratemd.com/blog/the-top-10-challenges-associated-with-medical-billing/