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Prepare now for payer precertification

Radiology Administrator's Compliance and Reimbursement Insider, July 1, 2006

Physicians affiliated with Blue Cross Blue Shield in the state of Alabama have changed the way in which they conduct radiology business.

As of April 1, physicians associated with the insurance giant are required to receive approval for imaging services from independent radiology management company CareCore National prior to referring or scheduling scans.

Similarly, Colorado’s Anthem Blue Cross Blue Shield recently joined the ranks of insurance companies that require imaging precertification. To manage its radiologists, the Colorado insurer hired National Imaging Associates (NIA). NIA reviews radiology providers and their practices.

Anthem even outlined standards of training and quality assessment that imaging providers must reach to remain within the network.

Precertification basics

What is precertification, and how does it affect the way in which you do business?

Essentially, precertification requires referring physicians to seek approval for imaging services prior to referring and scheduling scans.

This means that before a radiologist conducts any exams, the front office needs to make sure that the insurer approved the test.

“If the referring physician fails to obtain a precertification, or if the precertification is not approved due to lack of medical necessity, the claim for the imaging service will be denied,” Alabama Blue Cross Blue Shield said in a letter sent to its member physicians.

Politics behind precert

But precertification remains a somewhat controversial issue, even as more payers begin to adopt it as standard practice.

“It’s an attempt by payers to do what Stark was supposed to do in the first place,” says Larry W. Balmer, CCP, compliance, Health Insurance Portability and Accountability Act of 1996 (HIPAA) privacy, and security officer for Radiology Incorporated in Chicago.

Stark has not been as effective in controling escalating radiology expenses due to what’s commonly referred to as the “in-office exception,” Balmer says.

The in-office exception began as a way for private practice physicians to receive basic reimbursement for important, albeit incidental, office imaging. From its humble beginnings, however, the exception evolved into a way for physicians to achieve higher reimbursement by owning additional equipment.

So, payers began implementing additional requirements to slow overuse of imaging, says Balmer.

“All health plans are going to have some sort of review process,” says Alan Muney, MD, chief medical officer for OxfordHealth New England, in Hartford, CT. Oxford implemented precertification requirements some time ago.

“The costs of healthcare are high,” he says. “That’s the bottom line. We have to decide how to manage the affordability of these services.”

The precertification requirement involves additional effort and the potential loss of both revenue and customer satisfaction, Balmer and Muney agree.

“There’s not a bright line” showing who owns responsibility for which step, says Balmer. Such uncertainty creates additional paperwork and increases financial frustrations, he adds.

For example, imagine a case in which a physician refers a patient to a radiologist. The patient makes the appointment and on the designated day of the week, arrives for his or her scan. However, if the physician did not submit the information for the medical necessity precertification or the radiology intermediary denied the procedure, then the patient will be left standing in the radiologist’s lobby, wondering why this wasn’t already worked out.

“It creates a burden on the system and fundamentally takes away the ability to care for the patient from those most directly involved in patient care—the doctors and the radiologists,” says Balmer. “From the physicians’ and the radiology administrators’ perspective, [precertification] is difficult because it adds another step in the process,” Muney adds. But the intent of precertification is to add both quality and fiscal safeguards to the imaging industry, he says.

Muney points to recent governmental cuts to imaging reimbursements as motivators for the precertification change. “It’s about imaging affordability and appropriate use,” he says. “We are trying to drive appropriateness toward quality guidelines. Precertification may be just one step in the process, but it’s a necessary one.”

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