In the first year of my lean practice, I was denied payment for 8 visits. Not a bad number overall. But 6 of those were because I did not know the difference between HMOs and PPOs.
I know it sounds really silly now- but that’s the truth. I didn’t know.
The simple difference is that HMO plans need an authorization for their members to be seen by a specialist, PPO plans do not.
Of course, there are other differences too.
HMO plans usually do not have out-of-network coverage for their members. They are typically easier on the pocket for members. Many Medicare Advantage Plans are HMO Plans.
PPO plans often, but not always, have out-of-network benefits.
As a subspecialist, the important thing for me to know was that HMO plans need a referral from the primary care physician in order for the claim to be reimbursed.
To make matters worse, for outpatient office visits, they do not call the “authorization” an authorization. They call it a “referral”. But is not the same thing as a regular referral from the PCP- which is really a simple instruction to the patient to see a subspecialist.
This is where I got into trouble. I assumed that since the PCP had referred the patients to me, I was good to go.
Nope.
The real deal, what is really an authorization masquerading as a referral, has the following components:
-The Name, NPI, Tax ID of the specialsit who has been approved to see the patient
-An Authorization Number: very important. It will be what you will reference if there’s trouble with getting paid down the line
-Diagnosis Code for the referral. This can cause trouble. I received a referral to see a patient. It was an HMO plan- we got the authorization (I still call it that, and not a referral) from the primary care physician’s office and everything was set. Or so I thought. When the claim got denied and I found out why- it was because the diagnosis code on the referral was different from the diagnosis code on the claim. And minutely so. On the referral we had obtained, the code was N18.30 (Chronic kidney disease Stage 3). As a nephrologist, I almost always code that diagnosis more specifically as N18.31 (Chronic kidney disease Stage 3a) or N18.32 (Chronic kidney disease Stage 3b). And because the referral said N18.30 and I put N18.31 on the claim, the claim was denied!
-An effective To and From Date that the referral is valid
-Each CPT code for which the referral is valid. For eg., for office visits, a referral may have 1 unit of 99204 and 1 unit of 99205 approved.
You see the patient for the first visit and bill 99204. That unit is taken up.
The next time you see the patient, you will need another “referral” even if the effective date is still valid because you do not have 99213/99214/99215 (the follow up visit codes) approved in your initial referral.
And you do this every time. Prior to every visit, you or your staff need to make sure there is approval for the CPT code that is likely to be billed and that the dates are valid.
If not, you send a request to the PCP office.
Insurers usually give up to 3-6 months on a referral at a time. I’ve tried to get longer but have not been successful.
Some PCP offices will only authorize 1 visit at a time, as a policy. It does increase administrative burden on both sides.
To stay organized, I have alerts set up in the chart for HMO patients, that pop up when a new appointment is being made. It looks something like this: “HMO! PA (Prior Authorization) valid from 01/01/24-03/31/24: 2 visits: 99213/99214/99215; first visit was done on 01/04/24: 1 visit remaining”.
If the second visit is being done after the expiration date on the prior authorization, we need a new one, even though we have utilized only 1 of the 2 visits that was authorized.
Each insurance company has its own nuances with regard to how many visits they authorize at a time, the length of time these authorizations usually last, how particular they are regarding diagnosis codes, etc.
For example, a referral co-ordinator for one of my referring physicians taught me that for a certain insurer in my state, even if the authorization states six or twelve visits approved, they will deny claims after 2 visits. So, once 2 visits are done, I always get a new authorization for patients who insured by this company to avoid a denial.
All this seems like a bunch of trickery to me- but there’s not much I can do.
