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How to Obtain Medical Referrals and Prior Authorizations for Medicare Billing

Since the provider’s medical coder and biller are responsible for securing the necessary referrals and authorizations in Medicare and Medicaid, payment will be delayed if procedures aren’t rigidly adhered to.

Make sure you’re familiar with the difference between a referral and prior authorization. A referral is issued by the primary care physician, who sends the patient to another healthcare provider for treatment or tests. A prior authorization is issued by the payer, giving the provider the go-ahead to perform the necessary service.

Here are some things to keep in mind about referrals and prior authorization for Medicare and Medicaid services:

  • Standard Medicare does not require referrals or prior authorization for procedures that meet medical necessity and do not require any type of NCD or LCD. Fortunately, these represent the majority of treatment options.

  • A Medicare HMO or Medicaid patient who needs prior authorization before being treated by a specialist or to receive services provided by a facility needs a referral or authorization for each provider and possibly for each visit.

    If you get an authorization over the phone, always make note of the name of the representative with whom you spoke, along with the date and time of the call. If authorization was obtained via a payer web portal, print the screen for proof, just in case you need it later.

  • Some authorizations cover a period of time and/or a specified number of treatments or visits. Consider this example: A Medicaid or Medicare HMO patient may come to the primary care physician with a broken arm. The physician will probably authorize the patient to see an orthopedic surgeon for fracture care.

    The referral may authorize the specialist to diagnosis and treat the patient for up to three visits over a two-month period of time. If the specialist determines that the patient needs surgery, another referral or authorization is needed: The surgeon needs two things: authorization to perform surgery and a referral or authorization to treat the patient (perform the surgery) in the specified facility.

  • Authorizations normally are active over a specific date range and may expire if not used during that time. If the authorization date has passed, you need to contact the payer again and request another authorization.

  • The initial referral or authorization doesn’t cover additional services. If the services of a physical or occupational therapist are needed, another referral is necessary.

  • Obtaining prior authorization is still not a guarantee of payment. The submitted claim must still be 1) supported by medical necessity, 2) filed within the timely filing requirements, and 3) filed by the provider mentioned in the referral or authorization.

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