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 Concurrent Retrospective
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
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 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

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. Without the wait and paperwork hassle!!!!!!!!!!
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!!!!!!!!!!