How to Avoid Radiology Claims Denials — Authorization

Radiology claim denials can significantly impact revenue for physician practices. Reducing these denials requires coordination across scheduling, authorization and clinical documentation teams. To address these issues effectively, it is essential to understand the most common reasons for denials and take the practical steps needed to prevent them.

Reasons for Radiology Claim Denials

Three leading causes of claim denial include patient eligibility issues, lack of prior authorization and a failure to document medical necessity for the service. Each of these causes can be mitigated through proactive processes and improved documentation procedures.

Patient Eligibility Problems

Claims may be denied when a patient is not eligible for coverage on the service date. It can be the result of coverage termination, benefit coordination errors or mismatches in patient information between the provider and payer. 

Prevent these denials by:

• Verifying insurance eligibility in real time.
• Checking for secondary coverage.
• Using automated systems to recheck eligibility within 24 hours of the appointment.

Lack of Proper Authorization

Many insurance plans require prior authorization for imaging procedures, especially those that are higher in cost, such as MRI, CT and PET imaging. Performing these services without first obtaining the payer’s authorization will create a denial of payment when the claim for services is submitted. The authorization process begins with some of the same steps we discussed for patient eligibility — obtaining and verifying correct information about the patient’s insurance plan. 

Prevent these denials by:

• Establishing clear authorization workflows before scheduling.
• Documenting emergency cases thoroughly, noting if and why authorization was not possible.
• Training front-end staff to recognize exams that require preauthorization.

Failure to Document Medical Necessity

Payers review diagnosis codes and supporting clinical notes to determine if the imaging was warranted based on published guidelines. This means that claims can be denied if documentation does not justify the exam. 

Prevent these denials by:

• Ensuring radiologists and referring providers document the full clinical procedure, including prior interventions, symptom history and reasoning.
• Using decision-support tools aligned with ACR Appropriateness Criteria® to guide and document imaging decisions.
• Including documentation of how imaging results will influence patient management.

What Is Proper Authorization?

Proper authorization involves obtaining formal approval before performing imaging procedures. Other names include prior approval, precertification and preauthorization. It is a critical step in the revenue cycle because many insurance plans, including Medicare Advantage and commercial carriers, require this prior authorization for advanced imaging and nuclear medicine studies. 

How to Avoid Radiology Claims Denials Due to Failure to Obtain Proper Authorization

To reduce risk, it is essential to understand what constitutes proper authorization, how to obtain it and who is involved in the process. Key elements include:

• Correct Current Procedural Terminology (CPT®) codes for the procedure.
• Timely submission — retrospective authorization rarely gets approval.
• Adhering to the valid authorization period.
• Following payer-specific guidelines to get prior authorization.
• Understanding the emergency exceptions.
• Proper documentation and recordkeeping, with the authorization number, date of approval and authorized CPT codes.

Additional ways to avoid claim denial due to no authorization include:

1. Identify the Information Needed and Keep It up to Date

In addition to drawing on their own experience, practice managers might be able to schedule meetings or phone conferences with insurance company representatives to go over each payer’s policies and procedures for preauthorization. Reps can provide a wealth of information about the policy numbers requiring certain types of authorization and how to best obtain the authorization using the proper phone numbers or website addresses. 

It also pays to get the insurance company representative to confirm everything they have said in writing. Be sure the billing office or service regularly communicates any information about changes back to the authorization and reception staff.

2. Obtain the Correct Information Upfront

During patient registration, the staff must gather as much information as possible about the patient’s condition and the reasons for the exam. The radiology department or imaging center staff may have to contact the referring physician's practice. State regulations also govern whether the radiologist can obtain preauthorizations or if the ordering physician must do it. Consult your attorney to understand the legal implications of obtaining authorizations for your patients.

Submitting claims with incorrect information about the exam or the authorization will generate a denial, just as the lack of authorization will. The advent of ICD-10 diagnosis coding has increased the level of specificity required in the preauthorization process, and this specific coding must accompany the claim for it to be processed correctly. The practice must verify that it matches the exam to be performed, including the service date, as authorizations can expire. 

3. Coordinate, Verify and Change Authorizations When Necessary

A dedicated staff member should coordinate and verify authorizations. Reschedule the appointment to avoid an insurance denial if authorization cannot be obtained in time. This same person can be available to handle urgent, same-day appointments when necessary. 

Similarly, changes to the procedure originally ordered must be communicated to the insurance company so that the procedure codes ultimately sent in on the claim form match the payer’s authorization records. This often happens with exams where contrast material may or may not be utilized. Most payers have a limited window to update an authorization previously issued. 

4. Monitor Denials Reports

Monitoring the results of the authorization process is an important step to ensure claims are paid as timely and accurately as possible. Denial reports should identify when a denial is for improper authorization, and they can be used to identify trends or other problems in the process. Often, a particular CPT code or practice location is causing a problem with claims payment. This information will direct management to look further into the cause of the problem and fix it before it goes on for very long. 

Changes in personnel within the practice are often responsible for an increase in denials as the new staff learns the proper procedures. Be sure the knowledge of the process is not limited to one person’s mental notes! A comprehensive policy manual containing all of the information we have identified above will be a great tool when practices are faced with such staff changes.

5. Implement an Action Plan

The insurance payer is looking for information on radiology claims that matches its records and payment criteria. The radiology group will not be paid until everything lines up. By implementing processes and procedures to ensure that all the correct information is gathered before the patient’s exam, the practice can avoid denials that delay payment for the services.

Avoiding denial of payment due to a practice’s failure to obtain proper authorization requires a few simple procedures:

• Train registration staff to gather as much detailed insurance information as possible.
• Confirm the registration staff knows which procedures require prior authorizations. Train them to forward appointments for those procedures to the dedicated authorization staff.
• The authorization staff should obtain or verify authorizations when they are required and be ready to reschedule patient appointments when necessary.
• Implement a procedure that will allow prompt authorization of urgent, same-day appointments when necessary.
• Be sure the authorization staff is notified of changes that occur if the actual exam performed is different than the one authorized.
• Have a written procedure manual that is updated when insurance company rules change.
• Establish lines of communication so that everyone in the process is aware of changes.
• Monitor denials reports and act on any trends that are identified.

Why Trust Us?

Since 1995, Healthcare Administrative Partners has optimized provider performance with revenue cycle and billing services. Our expertise includes medical coding services, medical practice management and medical billing, which helps our clients optimize practice revenue, lower costs and reduce compliance risks.

We combine the skills of our knowledgeable healthcare management specialists with turnkey technological solutions to deliver premium support and bottom-line savings.

More on Managing Insurance Claim Denials

Along with patient eligibility problems and failure to obtain proper prior authorization, failure to document the medical necessity for the exam is the third biggest reason for insurance claims denials. Avoiding authorization claim denials demands a coordinated strategy that includes accurate scheduling workflows, payer-specific policy knowledge and thorough documentation. Taking a proactive, systems-based approach can minimize delays, prevent rework and ensure services are reimbursed appropriately.

By outsourcing your revenue cycle management to Healthcare Administrative Partners, your practice experiences lower pressures when it comes to relearning compliance regulations and the administrative process of managing claims denials. Our team is ready to help you achieve long-term success.

Contact us today to learn more about our medical billing and coding services.

Linked Sources

1. https://info.hapusa.com/blog-0/how-to-avoid-radiology-claims-denials-eligibility-problems
2. http://www.hapusa.com/6-proactive-medical-billing-tips/
3. https://www.acr.org/Clinical-Resources/Clinical-Tools-and-Reference/Appropriateness-Criteria
4. https://www.mayoclinic.org/billing-insurance/insurance/insurance-approvals 
5. https://info.hapusa.com/blog-0/what-radiology-practices-need-to-know-about-the-new-cms-updates-to-the-icd-10-guidelines
6. https://www.hapusa.com/services/medical-admin-consulting/ 
7. https://www.hapusa.com/contact-us/