Referral and Authorisation Process in the managed care environment

1. Referral and Authorization
Process in the Managed Care
Environment
By:
Debbie Jankowski
and
Joan Horen

2. 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.

3. 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.

4. 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.

5. 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”

6. 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)

7. 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)

8. 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.

9. 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

10. 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

11. IT “Solutions”
 Swiping Card
 Telephone
 Entering Number on Keypads
 Limited Functionality

12. 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

13. Regulatory Issues
 HIPAA – Health Insurance and
Accountability Act
 Adminitrative Simplification
 Standardization of Claims/Referral data
 Format modified on every 12 Months

14. Web ROAR
 ROAR – Referral or Authorization
Request
 Keystone
 Ranked 8th in Nation’s 25 Largest Individual
HMO Plans
 1,151,224 members (1998)

15. Web ROAR

16. 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

17. 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

18. Web ROAR Flow
Web 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

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

20. 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!!!!!!!!!!