Referral and Authorization Process in the Managed Care Environment By: Debbie Jankowski and Joan 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 Concurrent Retrospective 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   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 Flow

Web ROAR Limitations Only Highmark enrollees Carved Out MRI, Nuclear Cardiology, CT scans Primary Care offices – NOT hospitals, specialists, or ancillary service providers

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