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Medical Billing & RCM Insights Blog

Purpose of Prior Authorization is to verify and obtain advance approval from the payer if a patient requires a specific service before it is performed. This process helps to ensure that necessary services are not denied to patients. Prior Authorization is an essential component in Revenue Cycle Management and Medical Billing; this also follows the procedure of determining insurance eligibility, proper payment collection for the provided services, and simultaneously lowering denials and A/R follow-up. Purpose of Prior Authorization in Medical Billing is to ensure that the billed services are provided and that the appropriate payments are made.

During your training as a healthcare professional, it’s likely that you are not thinking about who pays for the treatment of your patients. Once you begin working as a practitioner, it’s critical to comprehend who the payers are. Since the American healthcare system mainly depends on third-party payers, it’s expected that your patients don’t pay the majority of their medical expenditures. Third-party payers are entities that pay for medical expenses not covered by the individual or family medical insurance policy. The federal government is the largest payer in the United States, but other third-party payers are also used in the U.S healthcare system.