Precertification: The Provider Foots the Bill

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Is radiology benefit management (RBM) companies extend the reach of precertification and preauthorization programs, hospitals and physician practices across the nation are incurring significant personnel and software costs in their efforts to manage program requirements. Precertification and preauthorization both refer to the need to get prior approval for a procedure, but there is a distinction between them, according to Christie James, MBA, radiology billing manager, Massachusetts General Physicians Organization, Boston. “Prior authorization is primarily to get approval for a surgery, usually, or some specialized scan or service, whereas precertification is usually managed for utilization purposes,” she explains. “A precertification is used to manage a referring physician’s utilization and the appropriateness of ordering scans.” If the proposed study is appropriate for the patient’s sign, symptom, or diagnosis, then the referring physician will be given a precertification number, which James describes as a green light to order the study. According to James, the precertification number must be obtained by the referring physician, not the radiologist, and the radiology practice or hospital performing the service then obtains that number from the referring physician. “The whole basis for this is that they are trying to train the referring physicians on the appropriate use of CTs, MRIs, and other high-end scans,” she says. “For example, if a patient came in for vomiting and the physician ordered a CT of the head, he or she probably would not get precertification for that, unless he or she can prove, through clinical evidence, that the vomiting could be from a possible brain tumor.” James notes that the occasional headline-making denial of certain medical services notwithstanding, the approval process for studies is not arbitrary, but in fact is based on a long history of medical precedents. “There is a clinical algorithm, designed using evidence-based medicine and ACR guidelines, that all the precertification management companies use to determine the appropriateness of ordering a scan,” James says. “We have our own [protocols] internally here at Massachusetts General Hospital (MGH). We are probably one of the leading organization in the country, in terms of decision-support systems; in turn, we’re educating our own doctors on the appropriateness of ordering high-tech exams.” If a study is denied, the precertification system does allow physicians to appeal. James says, “Physicians can appeal it through supplying clinical evidence. Their progress reports are required by the precertification management company that is either denying the precertification or is requesting additional information.” With the volume of certifications that are processed on a daily basis, one could understand how an answer could take time to develop, but this is not the case. “Currently, [answers are] almost instantaneous—you can get a precertification within one to two minutes, but then, if you are actually out in the field and interviewing the secretaries, I’m hearing 20 to 40 minutes. It all depends. [The RBMs] are getting a lot better in their turnaround and perfecting their systems,” James says. Pay to Play Nonetheless, the precertification process has added another layer of bureaucracy to the health care system, and practices are bearing the unreimbursed costs of the process. James says, “If your doctors are seeing 20 to 25 patients a day and they each need a scan, it takes a lot of [administrative] time. Let’s say you are a primary care physician and all of your patients need some type of high-tech imaging. If you have one secretary for three doctors, you can see the implications and the administrative burden on a practice.” Likewise, hospitals and radiology practices that own imaging centers incur the additional costs of ensuring that the precertification numbers have been obtained before the patient arrives for the scan, or they risk a denial of payment. James notes that the size of the practice does not reduce the administrative burden, although a larger practice may be able to absorb the associated costs better than a small one. “At MGH, we’re about to publish the actual costs that our health care system has incurred for both the hospital and imaging centers, spent to ensure we get the precertification—and we haven’t even accounted for the referring physician’s costs. We had to hire several FTEs just to manage the precertification programs from four different RBMs and from other payors requiring precertification. We designed our own software to manage the precertification for each RBM and payor because our volume is so high, and each payor or RBM has a separate set of rules.” From James’ perspective, the investment is necessary to protect the hospital and imaging center’s revenue, but smaller practices will have a more difficult time bearing these costs. “If you look at the cost against the percentage of [our] net revenue, it’s minimal,” she notes. “I can’t imagine, if you are a smaller practice or hospital, that you could sustain costs like that.” James says that at a recent meeting of the RBMA, she took an informal poll of her peers. She discovered that approximately 80% of the audience members had incurred additional costs to their practices to manage the precertification programs imposed on them by RBMs or payors. No one, however, had quantified the cost of the precertification process against the revenue that it generates. “We need some kind of appropriateness in ordering these scans—some type of boilerplate to help us get utilization under control,” James acknowledges, but the precertification process saddles providers with the bill. “They are taking money out of the system and also costing primary care physicians more money,” James notes.