Pre-Authorization of Medical Services: New Guidance From WCD
The WCD issued a significant decision addressing an insurer’s obligation to respond to requests for pre-authorization by medical providers. Our rules impose specific processing requirements related to elective surgery or diagnostic imaging, but adjustors frequently receive requests to pre-authorize other therapies and referrals. The provider wants to be sure they will be paid for the services they provide, yet insurers rely on having sufficient time upon receipt of bills to determine whether they are compensable. Pre-approval or guaranteeing payment for treatment that has not taken place amounts to sending a provider a blank check.
In Gerardo L. Herrera, 21 CCHR 13 (2016), an insurer failed to pre-approve a referral for services recommended by the AP (and was fairly unresponsive). More than a year following remand by the Court of Appeals, the WCD determined that, while requests for pre-authorization are not “claims” for compensation that require formal acceptance or denial, inaction in this instance was not an option because it impeded claimant’s ability to receive the recommended treatment.
The following is a breakdown of the WCD’s pertinent “conclusions,” taken directly from the order. I encourage you to read the entire order (including footnotes):
- ORS 656.245(1)(a) imposes a duty on an insurer to facilitate the provision of medical services, separate from and in addition to the duty to accept or deny a “claim” under ORS 656.262(6)(a).
- An insurer violates that duty when, as in this case, the insurer fails to act to facilitate the provision of medical treatment, even though the insurer is aware that medical treatment is necessary and that treatment will not be provided without the insurer’s intervention; and
- if the insurer fails to take action in furtherance of its duty, and fails to take steps to resolve hindrances to the provision of medical services, the director may fashion a remedy to cause the service to be provided.
I offer claims adjustors this take-away: At the heart of this dispute is ORS 656.245(1)(a), which requires insurers to “cause to be provided medical services…” The WCD wants you to process claims in a reasonable fashion infused with common courtesies. Be kind. Return calls. Respond to requests. Explain the process clearly to providers and claimants because it is confusing. Do something. You have some responsibility to make sure a claimant has access to recommended medical services. If you know they will not be able to receive the treatment without some action on your part, you have a heightened, albeit vague, obligation to “resolve hindrances.” Some options for responding:
- Notify the claimant and provider that you need time to evaluate the request
- Arrange a consultation exam like you would for an elective surgery request.
- Explore alternatives with the AP, provider, and billing office.
- Respond by “authorizing” the services noting pre-authorization does not guarantee payment or constitute a formal compensability determination.
- Call your attorney.
If this order leaves you feeling puzzled or frustrated, give me a call and I will validate all of those feelings.