A patient underwent a chest MRI with contrast. While studying the results, the radiologist determines an abdominal MRI would give the better view needed for proper diagnosis.
“Imagine having the patient either wait for the additional authorization or scheduling [the test] for another date. This is not healthcare at its finest, when patient care is driven by mandates for payment,” says Catherine M. Pallozzi, CHAM, CCS, director of patient access at Albany (NY) Medical Center Hospital. The same is true if a surgeon encounters unexpected complications during a procedure. Requiring any medical professional to secure an authorization right in the middle of possibly life-saving treatment “is an absurdity,” Pallozzi says.
Denied claims for urgent, medically necessary procedures are no laughing matter. Patient access staff have to appeal each denial, a time-consuming and expensive process.
New York state recently enacted a law that aims to stop “no auth” denials for urgent and medically necessary procedures and treatments. The law states that if a patient presents with unexpected complications or requires additional services in the course of treatment, a health insurer will no longer be able to deny payment due to lack of prior authorization. “The legislation is long overdue,” Pallozzi says. “It will provide the physician the ability to do what is best for the patient.”
The department will save the equivalent of almost one full-time equivalent due to far fewer claims denials having to be appealed. “It will remove inefficiencies and additional labor costs in the revenue cycle,” Pallozzi predicts.
Tamara C. Imm, CPA, vice president of front end revenue cycle at Rochester (NY) Regional Health, says the legislation is “a great concept, removing authorization requirements from potentially interfering with medically necessary care being rendered.”
If authorization was obtained for an excisional biopsy of the breast, that patient could end up undergoing a mastectomy because of what the surgeon finds during the procedure. Since no authorization was obtained for the mastectomy, “in the past, the hospital risked nonpayment due to payer policies,” Imm says.
With the new law in place, the payer would have to cover the mastectomy since the initial procedure was authorized. Imm expects her department will see far fewer “no auth” denials, which currently cost the health system more $1 million a year. “Despite having multiple resources dedicated to managing this process, there is still no guarantee,” Imm adds. The legislation does not cover all “no auth” denials. It specifies an authorization must be in place for the first procedure. “It does not appear to address the situations in which we have not already obtained authorization for the procedure initially scheduled, since it wasn’t required,” Imm says. If no auth was needed for the first procedure, there is a chance payers will still deny the additional procedures that do require prior authorization.
While the law does not specifically address that kind of situation, it does cover a common problem with chemotherapy drugs. Cancer patients often start on one drug, with authorization obtained, but the medication may not work. Starting a new drug normally required another authorization. “This sometimes delayed medically urgent care,” Imm says. It also caused claims denials if the drug was ordered without the auth in place. For hospitals, says Imm, “this has been extremely costly.”
Now, the new drug could be started immediately without needing to wait for authorization. “The legislation will be a win for chemotherapy patients who require immediate treatment,” Imm says.
(Editor's Note: Read more about the recently enacted New York law at: https://on.ny.gov/32NpYNp.)