What is a Referral in Medical Billing?
Often, your primary care doctor may ask you to see a specialist for specialist advice and care to manage your clinical condition. Seeking help from another specialist for additional services and administration is considered a “referral” in medical billing.
Most importantly, you should get approval from your primary care physician before making an appointment with another specialist. Otherwise, your health insurance plan will not cover the cost of the corresponding appointment.
Referral from your doctor is required to ensure you get paid for your treatment. According to a medical bill, it is an essential record obtained from a provider to get skilled services from a specialist referred to you by your physician.
What is Prior Authorization in Medical billing?
In prior authorization, you need permission from your health insurance company to do certain tests or medications, and if you don’t have permission. Then, the insurance company won’t charge for expensive tests/treatments like MRIs, CT scans, or heart surgeries.
In other words, prior authorization is a formal request from a medical provider (before providing medical services) for the insurance company to allow continued medical services. Authorizations can be obtained for testing, surgery, prescriptions, and other medical services.
Additionally, stress tests and other tests or some procedures that require prior permission, spine surgery, joint surgery. Such as total knee and hip replacement, and sometimes medication, usually expensive medication, e.g., Humira, rheumatoid cost of arthritis.
The doctor or hospital usually doesn’t know the patient they are treating has a prior authorization approved or not because they handle a lot of patients in a time.
However, prior authorization is not a promise to pay in a claim. This is simply a guarantee that the payer will pay for the medical expenses if certain conditions are met.
Types of Prior Authorization:
There are two main types of prior authorization:
Prior perception authorization: Some prescription drugs also require prior authorization. Like, the medication that has any side effects. Or it may lead to drug abuse. Plus, maybe it can be dangerous when used with certain medicines. Or, expensive drugs with cheaper options.
Prior medical authorization: If the patient’s insurance company does not cover the services prescribed by the doctor, the primary care provider must obtain a medical certificate. Physicians should contact the insurance company or complete the required form stating the reason for requesting the prescribed service and the supporting clinical factors.
Difference Between Referral and Prior Authorization in Medical Billing
Yes, it’s confusing but very dissimilar.
A referral is when your healthcare provider recommends that you receive medical services from another healthcare provider or professional.
Prior authorization or precertification means certain medical services or pharmacies/drugs require prior consent from your healthcare provider.
For instance, if you have had hand surgery, you will go to the emergency room and be followed up by an in-network healthcare provider. But now it appears that you need additional medical care and your physician is not good at this type of treatment.
Then, you should be referred to a network specialist who can provide in-network or out-of-network services, which is the referral you need to get medical care from your healthcare provider.
A health plan where a specialist will review your health, and determine what actions you need to take to get your hands fully mobile.
Once the medical procedure is best determined, the specialist will need to obtain pre-approval, or certification/ prior authorization of eligibility, from your health plan before you can proceed with the plan.
Your health plan requires prior authorization for certain procedures that cover medical services without prior permission.
Some medical services are not covered in your health insurance benefits. Then, you will be responsible for paying them in full. But, in some cases, you may face penalties because your health care provider is responsible.
Best to consult your medical billing consultant before treating any new patient.
What to do if your prior authorization is rejected?
I-Meds Claims to the rescue.
If you are stuck with the referral procedure and prior authorization, you can call us directly. We understand that handling rejections quickly and efficiently is key. If a claim is submitted to the insurance payer without authorization or referral, the claim will be denied. Prompt action in these situations is critical.
As a physician or a medical practitioner, if you got any queries related to referral or prior authorization. Then, it is best to hire the best medical billing firm in the USA so you can fully be paid for your services. We will take care of all the processes for you without any complications.
When an insurance company rejects a missing referral, it’s important to know whether they will accept a referral that is received after the fact. If so, there may be a limit to how long a referral can be received after the date of service. Therefore, the referring physician needs to contact the insurance company to see if a retrospective referral can be made.
In the absence of prior authorization, the service provider must obtain retrospective authorization from the carrier as far as possible. As with the lack of references, not all insurance companies allow this. Retro licenses will also be time-limited, so it is important to deal with denials as soon as they are received. Unfortunately, if the carrier does not allow this, the claim must be settled as it is the provider’s responsibility to obtain the license.
Avoiding these adverse outcomes starts with education; understanding the difference between the two terms and what they mean for the claims life cycle, understanding the insurance company’s requirements ahead of time, and filing a claim with all the necessary support in the first place.
Hire I-Med Claims For The Stress-Free Results
Prior authorization or referral has been a frustratingly moving target for major practices like cardiology many times. Of course, there is a conflict between care, the need for a good diagnosis, and the profit insurers seek.
For the cardiology practice managing its prior authorization. Major setbacks include the time and overhead involved in doing so. Physicians, nurses, and administrators can spend more time on tasks that add to practice, rather than seeking prior permission.
Prior authorized outsourcing is a great option that can save time and money for your practice.
I-Med Claims will keep up with changing needs and have a streamlined process to ensure maximum success.