A Case Study in Reducing Denials and Increasing Revenue for a Sleep Speciality Office

Introduction:

Navigating the complexities of the prior authorization process can be daunting for healthcare providers, often leading to administrative burdens and financial setbacks. However, the case of a healthcare practice highlights how adopting a proactive approach to prior authorization can drastically reduce denials, streamline operations, and significantly improve revenue. This blog will delve into the details of the transformation, facilitated by the Way2Cloud team, and provide insights into the tangible benefits of proactive prior authorization.

Understanding the Challenges:

This Healthcare practice faced a significant challenge with prior authorization denials, particularly for CPT code 95800 (unattended sleep study), which is crucial for their services. Their ratio for such studies was four patients per week. Despite their efforts, denials were common due to various administrative errors and procedural inefficiencies. Additionally, incorrect billing for new patient codes exacerbated their financial losses.

Implementing a Proactive Strategy:

Recognizing the need for change, the Healthcare practice partnered with the Way2cloud team to implement a proactive prior authorization strategy. Together, they began initiating prior authorizations as soon as patient appointments were scheduled. This early action gave them the necessary leverage to address any potential issues before the patient’s visit, ensuring smoother processing and approval.

Impact and Tangible Benefits:

Over four months, the practice, with Way2Cloud’s assistance, significantly improved its prior authorization process. Here are the key outcomes:

• Volume of Prior Authorizations: With an average of four prior authorizations per week, the healthcare practice processed 64 authorizations over four months (4 patients/week * 4 weeks/month * 4 months = 64 authorizations). 
• Financial Recovery: Each CPT 95800 authorization billed at $397 resulted in a total collection of $25,408 over the four months. Projected annually, this proactive approach could generate $76,440. 
• Error Reduction: By addressing incorrect billing practices, the sleep specialty resolved issues with six new patient codes being billed incorrectly each month, previously leading to a monthly loss of $1,500. 
• Revenue Enhancement: With an average monthly collection of $49,000, the improvements in prior authorization and billing processes significantly bolstered their financial health. 
• Reduction in Denials: Within just two months of implementing the new strategy with Way2Cloud, Sleep Specialty saw a complete stop in denials related to prior authorizations for CPT 95800. This drastic reduction highlighted the effectiveness of their proactive approach. 
• Operational Efficiency: Streamlined authorization workflows reduced administrative burdens, allowing staff to focus more on patient care and less on paperwork. 
• Enhanced Patient Satisfaction: By minimizing delays in treatment approvals, patients received timely care, leading to improved satisfaction and loyalty.

Conclusion:

This case study demonstrates the profound impact of proactive prior authorization on healthcare efficiency and revenue. By working with Way2Cloud, this healthcare practice reduced denials, recovered significant revenue, and improved operational efficiency. For healthcare organizations facing similar challenges, a proactive approach to prior authorization can unlock new levels of financial stability and patient satisfaction, ensuring sustainable growth and success in a competitive landscape. This is one such example of the benefit of outsourcing revenue cycle management.