What is Retrospective Authorization in Medical Billing?

Preauthorization is a familiar aspect of medical billing, but Retrospective Authorization, or RA in medical billing, is also a necessary part of billing, given that sometimes care has been rendered or services received prior to insurance authorization. It is less discussed but of great significance in the provision of reimbursement to the providers of necessary and mostly urgent services. To healthcare providers, billing departments, and practice managers, RA in medical billing guides them in reducing claim denials, continuing compliance, and filling the wallet with payment for those services that can not wait to be requested.

What is Retrospective Authorization (RA)?

Retrospective Authorization is a process used to seek medical service insurance coverage on a procedure after the medical procedure has taken place. Unlike prior authorization, where it is usually required before the services can be delivered, RA enables the providers to seek coverage consideration on care provided when there was an urgent or sudden need without prior notification. This kind of authorization is mostly applied to emergency cases in which delaying treatment in view of authorization by the insurance is unrealistic or impracticable. When this happens, the providers will give the required services and later request the payer to have the treatment retro-approved to receive their reimbursement.

Retrospective Authorization in Medical Billing Services

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What is the applicability of retrospective authorization?

Emergency Situations: In cases where a patient is in need of urgent care when he or she is in trauma, cardiac arrest, or a severe psychiatric episode, and prior authorization cannot be secured. In any of these cases, the provider should be able to file an explanation of the medical necessity of the service and file the retrospective authorization request as early as possible.

After-Hours Care: When a patient receives treatment at night or on weekends, when the prior authorization offices are closed.

Late Insurance Certification: At times, the insurance may be unavailable at the point of service encounter, and this tends to be common in unconscious or uncommunicative patient situations.

Out-of-Network or Non-Participating providers: In urgent care cases, when services are provided by an out-of-network provider and a transfer to an in-network provider is at all possible, RA may be sought.

The Process of RA in Medical Billing

Medical Necessity Documentation: Good medical records are mandatory. Patients and providers should be able to show clearly that the services they received were essential, were emergencies and which were not able to be postponed.

Timely Submission: The majority of payers provide rigid time limits on RA requests submission, usually within 24-72 hours after the service was provided. The inability to meet these deadlines usually results in claims being denied.

Authorization Request: The provider or billing staff will send a formal request to the payer for authorization, along with supporting clinical reports and reasons as to why prior authorization is not possible.

Payer Review: The insurance provider will consider the request in their medical policies, coverage, and the urgency of the case.

Decision Notification: In the event of such approval, the payer provides a retroactive authorization number. In case of denial, the provider can challenge the ruling by sending in further paperwork or by demanding a peer review.

Retrospective Authorization Challenges

Although it is beneficial to have RA in a medical billing system as a safety net, there are a number of drawbacks and dangers associated with it:

Denial Rates: The fact that the service has already been provided means that payers usually pay closer attention to RA requests; the request is more likely to get denied.

Administrative Burden: Gathering comprehensive documentation after service, adhering to narrow deadlines, and tracking correspondence with payers consumes time and workforce.

Revenue Risk: In the event the retrospective request is refused, the provider may not be paid and instead may be able to absorb the cost or, more likely, may be able to bill the patient directly, at which time patient dissatisfaction is likely.

Policy Variability: Various rules apply to different payers as to what services qualify to be RA, and billing teams are at a disadvantage to come up with one approach to fit all.

Best Practices for Managing RA in Medical Billing

Train Staff: Make sure that front-desk, clinical, and billing personnel are aware of RA policies and the information on flagging potential requirement cases.

Document Everything: The best evidence in support of RA requests is comprehensive and on-time clinical documentation. Never leave out reasons as to why care could not take place later.

Track Deadlines: Establish a system of internal reminders to make sure that RAs’ requests are sent in time as required by the payer.

Follow Up: Check the status of every RA request and be ready to escalate or appeal in case of need.

Know Your Payers: Keep a current reference of the RA policies of each payer in order to make the workflow more efficient and minimize confusion.

Make Sure You Receive a Salary for the Care You Give

Billings with RA services may be complicated, particularly with a complicated deadline and various payer specifications. Med Bill Ultra has the billing specialists trained to work with retrospective authorizations accurately and diligently so that your urgent care services are not going to remain unpaid. Contact us and get a customized solution and a free revenue cycle evaluation to find out what we can do to ensure your practice gets every dollar it deserves.

Conclusion

RA in the field of medical billing, or Retrospective Authorization, is an important tool that enables an issue of healthcare providers to provide care urgently without the administrative downsides, and obtain subsequent reimbursement. It should be noted, though, that its efficient utilization is possible only with the ability to document this properly, to stick to the deadlines, and to know the payer’s policies well.

RA can offer protection in the area of finances as well as assurance of compliance where prior authorization is not available. To the providers and the billing teams, there is a need to perfect the RA process to assure the provider that their revenue flow would be maintained and they can offer care without compromises.