Referral and Authorization Process in the Managed

Care Environment

By:Debbie Jankowski

andJoan Horen

Definition of Managed Care A system of health care delivery that tries to manage the cost of health care, the quality of health care, and the access to that care. Common denominators include a panel of contracted providers that is less than the entire universe of available providers, some type of limitations on benefits to subscribers who use noncontracted providers (unless authorized to do so), and some type of authorization system. Managed health care is actually a spectrum of systems, ranging from so-called managed indemnity through PPOs, POS plans, open panel HMOs, and closed panel HMOs.

In 1973, fewer than one in every 25 privately insured Americans were enrolled in a managed care plan, now two out of every three privately insured Americans are in such a plan.

 

Reasons for an Authorization System

Case review for medical necessity by the medical management function of the plan.

Direct care to the most appropriate setting. (Inpatient vs. Outpatient or in the provider’s office)

Provide timely information to the concurrent review utilization system and the case management system.

Assist in the finance estimate of the accruals for medical expenditures each month.

Authorization System Has to define what services require

authorization and what do not. Determine who has the authority to

authorize services for members: PCPs Plan’s Medical Director

The tighter the authorization process the stronger the utilization management by

the payer/plan.

Authorization Types Prospective

Issued before ay service is rendered Concurrent

Allows for timely data collection and the ability to impact the outcome

Retrospective Issued after services are rendered

“Emergency Situations”

Authorization Types (cont.) Pended (for review)

Determine the status of an authorization: Medical necessity Eligibility Administrative review

Denial Subauthorizations

Common with hospital based services(Radiology, Pathology, Anesthesia)

Common Authorization Data Elements

Member’s name Member’s birth date Member’s plan identification number Eligibility status PCP Referral provider’s name and specialty Outpatient data elements

Referral or service date Diagnosis (ICD-9-CM) Number of visits authorized Specific procedures authorized (CPT-4)

Common Authorization Data Elements (cont)

Inpatient data elements Name of institution Admitting physician Admission or service date Diagnosis (ICD-9-CM) Discharge date

Subauthorizations Hospital based providers Other specialists Other procedures/studies

Free text to be submitted to the claims dept.

Methods of Communication Paper-Based System

Pre-printed paper forms through the mail Telephone-Based System

Phone tag, busy signals, waiting on hold Busy fax machines

Electronic System Built in edits on-line Claims submission most common Authorization & Eligibility information available Dedicated lines connected

Problems with Authorization Systems

Lack of standardization of required information and format between the insurance plans

Coordination among the players of the paperwork

Ongoing changes Administrative costs Declining reimbursement

IT “Solutions” Swiping Card Telephone Entering Number on Keypads

Limited Functionality

 

Application Service Providers Integration of eligibility, authorization, referrals

Physician Offices and MCOs Cost Savings

Medical Mutual of Ohio – reduce 10-12 FTEs = $600,000.

Time Savings Authorizations from 30 minutes to 10 minutes

Reduction in errors Improved Patient Satisfaction One-Stop-Shopping Diffuse Costs

Regulatory Issues HIPAA – Health Insurance and

Accountability Act Adminitrative Simplification Standardization of Claims/Referral

data Format modified on every 12 Months

Web ROAR ROAR – Referral or Authorization

Request Keystone

Ranked 8th in Nation’s 25 Largest Individual HMO Plans

1,151,224 members (1998)

Web ROAR

Web ROAR Functionality Submit referral and authorization

requests Verify patient membership Search for specialists, providers,

hospitals, or other facilities List historical

referrals/authorizations for patients or practice

Track utilization patterns for practice

Web ROAR Main Menu Request for Services View Messages Member History Office History Member Check Specialist Check Facility Check Procedure Look up Diagnosis Look up Report Selection Bulletin Board Case/Disease Management

Web ROAR FlowWeb Roar Flow

Active Member Search Window

Request for Services Window

Summary/Verification Window

ROAR ConfirmationWindow

Fax/Hardcopy

Request Window

Specialty Windows

Procedure Code Search Window

Diagnosis Code Search Window

CDM Referral Entry Window

2 a

2b

4a

Web ROAR Limitations Only Highmark enrollees Carved Out MRI, Nuclear

Cardiology, CT scans Primary Care offices – NOT

hospitals, specialists, or ancillary service providers

At Last……Managed Care A system of health care delivery that

tries to manage the cost of health care, the quality of health care, and the access to that care….

Without the wait and paperwork hassle!!!!!!!!!!