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Feb 2015

The Tricky Business of Health Plan Authorizations!

Ever parked your car in a parking lot and received a ticket claiming to absolve the owner of the lot of any responsibility if the car gets damaged in the lot? As you might know by now, that language limiting liability is virtually useless. Much the same logic applies when a provider calls a health plan for authorization to render patient care and is required to listen to the canned disclaimer indicating that authorization is not a guarantee of payment. If that statement were correct, then what is the purpose of obtaining an authorization to treat? If authorization does not equate to a payment promise, does it allow the doctor or hospital to treat you without any expectation of payment?

Health plans would like you to believe that the authorization is simply to fulfill its duty of giving doctors and hospitals the ‘go- ahead’ to treat you without of course actually providing an enforceable promise to pay for the treatment you receive. Here at SAC we argue that if the plan authorizes the treatment then they are responsible to pay for the treatment. The health plans cannot have it both ways. And we are generally successful in making them pay for the treatment rendered. Also that number the plan provides you with and call it a reference number? – We argue that is the authorization number and our argument is accepted by most arbitrators as establishing the existence of authorization for purposes of reimbursement. Thus denials based on a lack of authorization number in those cases where only a reference number was provided, should be pursued. Just like the parking stub, the existence of the recorded disclaimer does not prevent you from seeking payment for your authorized treatment.

Just remember, authorization is a fertile area for healthcare payors to muddy the waters relating to reimbursement and deny payment. Don’t fall for it!.

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