Our last article focused on the complexities of the credentialing process with managed care payers. Part two of this three part series will focus on what happens after credentialing, specifically managing the referral and authorization process.

At last you are a credentialed provider! Congratulations! All the time spent filling out applications, and signing forms and providing proof of licensure, Medicare certification, and insurance, negotiating rates, and the endless chain of e-mails back and forth with the managed care contract representative is finally over. You can, sit back, relax and watch your census grow and the money roll in. Wrong! Now comes the hard part. Make sure your staff is well trained on insurance verifications and the authorization process or you will look up after a few months to realize that you have provided dozens or even hundreds of visits only to realize that you a haven’t collected a dime.

Intake and Eligibility Verification

Educate the staff on how to verify eligibility on a patient with each new payer.

  • Sit in on an eligibility verification phone call or if the payer has web access for eligibility verification, which many do, walk through on-line eligibility verification with your intake team
    • – Unlike Medicare, these plans have co-pays and deductibles. You need to know in advance what the patient responsibility is prior to providing the care.
    • – You will need to know if the patient has a secondary insurance to be billed after the primary insurance pays. Secondary insurance information, such as policy and group numbers must be gathered at intake and that secondary insurance needs to be verified, also.
    • – Your intake staff must know the specific payer plans covered by your contract. We suggest posting a list of the plan types covered by your contract and more importantly, a list of the plan types excluded under your contract.

Authorization and Re-Authorization

Each payer has a specific and unique authorization/notification process. Failure to understand and follow this process exactly as the payer prescribed will result in claim denials. What does it take to get authorization?

Make sure your authorization team can answer the following questions about the payer authorization process:

  • Does certain information such as the referral and care plan have to be faxed to the payer?
  • Is there a number to call so that authorization can be discussed with a case manager?
  • Does the payer require that they get copies of your visit notes and if so, how and how often do you send those notes to the payer?
  • Can authorization be secured on line at the payer’s web-site?
  • Does the payer issue authorization numbers?
  • How many and what type of visits are covered by this authorization how do you get additional authorization if needed?


Some payers require when seeking authorization that an agency request the approval or authorization of specific HCPCS or CPT codes. Your contract with the payers, in that all important fee schedule, very likely lists the specific codes covered under your contract. The authorization team in your agency must know the codes covered in your contract and if required by the payer should be specifically getting those and only those codes approved when seeking authorization.

Visit Tracking and Managing the Authorization

There must be controls in place to track the number of visits provided compared to the number of visit authorized. Providing visits in excess of your authorization will result in claim denials. Most software systems have tracking features that provide scheduling controls or at least reporting that will assist with this. It is strongly advised that your staff learn how to use these features! Manual authorization tracking on a spreadsheet, white board, or authorization notebook is a cumbersome, error prone and costly exercise!


The administrative cost of working with Managed Care payers cannot be ignored. You only get a flat rate for each visit you provide and you only get paid when you follow the payer process EXACTLY! Take the time to put efficient and accurate systems in place to manage this business line. Test the efficacy of these systems periodically. If they aren’t working, change them! Use the tools that technology provides, such as payer web-portals and software authorization controls to keep the payments coming in and the costs down! In light of Medicare rates continuing to decline agencies must figure out ways to secure additional revenue. Just recording revenue in the financials is not going to help! Agencies must maximize collections for the revenue they create. Without effective verification, authorization and billing with the appropriate codes, agencies don’t have a chance of becoming a leader as a Managed Care Provider.