The Value of an Offensive and Defensive RCM Game Plan: Orthopedic ASCs Score Big Wins with Prior Authorization Strategies

Prior authorizations stand as both a gatekeeper and a stumbling block for the ASC industry. These pre-approvals required by payers serve as a crucial step in ensuring the medical necessity of procedures while functioning as a cost-control mechanism. However, the journey from authorization request to approval is often challenging, particularly for orthopedic procedures.

Inconsistent payer requirements are one of the primary reasons for the contentious nature of prior authorizations, as this leads to confusion, inefficiencies, and claim issues. Obtaining approvals for orthopedic procedures poses even greater challenges due to their surgical complexity and specialized equipment. Since most orthopedic surgeries require prior auth approval, surgeons are pulled into a variety of administrative tasks to meet each payer’s requirements. From providing additional documentation and advanced imaging to advocating for patients in peer-to-peer reviews, orthopedic surgeons carry a disproportionately higher burden of acquiring authorizations as part of routine patient care, leaving them with less and less time to utilize their surgical expertise in the operating room.

From a financial perspective, authorization denials or delays can inflict revenue loss when previously scheduled surgical procedures need to be postponed. Any unforeseen changes during surgery can also impact the validity of a prior auth approval and the ability to receive reimbursement. Delays and denials can also result in patient dissatisfaction, additional costs handed down to the patient, and potential harm from delaying a necessary surgery.

Since prior auth denials represent one of the largest segments of claim denials for healthcare organizations, at nearly 40%, developing a game plan to prevent them means striking a balance between offensive and defensive revenue cycle strategies. It’s often said that the best defense is a good offense; however, recent surveys reveal that providers allocate more time and resources to defensive denial management strategies in the accounts receivable (A/R) department rather than focusing on offensive, front-end denial prevention, such as streamlining or automating prior auth requests, a relatively manual process.

While healthcare organizations are completing more administrative tasks electronically, as manual data entry has been linked to high error rates, only 26% of prior auth requests were fully electronic in 2021, with 39% partially electronic. According to a report from the Council for Affordable Quality Healthcare (CAQH), more than one third of prior authorization transactions (35%) were fully manual during this time.

Adopting an offensive prior auth strategy that prevents denials, improves your rate of approvals, and achieves approvals faster begins with decreasing your rate of errors and developing a front-line strategy to:

  1. Tighten front-end processes

    Errors within manual entry, such as patient demographics, greatly contribute to unnecessary denials. Improve your team’s rate of accuracy by allocating resources towards technology that facilitates near-term and long-term improvement, such as automated or electronic processes. Aside from upgrading your workflow, it’s also necessary to ensure your team is knowledgeable in all aspects of payer requirements for prior authorizations. Since pre-registration, eligibility verification, and prior authorization are a full-time focus, it’s necessary to have a full-time team on your side. However, staffing the appropriate experts who can navigate the complex prior authorization process, particularly for orthopedic procedures, is not always financially feasible for ASCs and smaller healthcare practices, which is why turning to an outsourced revenue cycle provider can be a less costly and more efficient option.

  2. Apply payer contracts to the authorization process

    While reimbursement terms within managed care contracts can be negotiated, prior authorization requirements are set by each payer and they are subject to change at any time. Ensure your team has access to complete contracts and they understand how the contract language applies to the authorization and claim submission process for each procedure. As we recommended in our previous Becker’s ASC Review article, if you have a list of surgeries that require authorization from a particular payer, it’s still a good idea to check for updates. Partnering with a revenue cycle management provider can give your ASC access to a specialized team of managed care contracting professionals with expertise in your payer mix and procedures to better streamline this process.

By adopting these proactive approaches, ASCs can tackle their most pressing prior auth challenges head-on. However, an offensive front-end strategy requires a strong defensive A/R strategy to efficiently manage and overturn denials, capture data for where you can improve, and relay denial patterns to the appropriate department to optimize your preventative game plan. Since effective A/R management is time-intensive, ASCs often utilize an end-to-end revenue cycle management firm to streamline processes, reduce days in A/R, and prioritize denial follow-up by the claim’s dollar amount and payer’s timely filing deadlines to increase cash flow and rate of collections. The right partnership also provides additional benefits, including insights on industry trends and innovative solutions to address new challenges.

In conclusion, your revenue cycle plays a vital role in the health of your practice and your surgical facility. By adopting an offensive and defensive revenue cycle management game plan that includes strategic partnerships and streamlined processes, ASCs can alleviate stressful prior authorization challenges, providing more time to focus on initiatives that benefit patients.

Meet Kelley Blair, Tim Fuchs, and the nimble solutions team at the Becker’s 21 Annual Spine, Orthopedic and Pain Management-Driven ASC + the Future of Spine Conference, June 19 – 22 in Chicago at booth #502, or visit to learn more.

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Webinars

Featured Whitepapers

Featured Podcast