Pre-Authorization – What It Is and How to Go About It

by | August 3, 2021 | 7:26 am

Pre-authorization, also referred to as prior authorization, is a process that helps both patients and customers of medical equipment as well as providers of DME/HME.

A DME/HME gets paid for the equipment purchased by a patient only when there is a written prescription or authorization by a doctor for its use. Medicare guidelines can help explain whether a particular equipment or its usage needs pre-authorization.

For a Medicare beneficiary, pre-authorization helps patients receive the medical equipment they need without delay.

If your DME/HME handles equipment needs for patients covered by Medicare, here’s what you need to know about pre-authorization:

  • It allows a temporary or interim assurance of coverage to be reviewed before supplying the patient with the equipment.
  • It is required before a claim is submitted for payment.
  • It helps providers ensure eligibility for insurance coverage and payment is met before they supply the prescribed medical equipment to the patient.
  • When conducted successfully, it can help provide DME/HME businesses with assurance of payment for the equipment delivered.
  • It needs a written prescription rather than a verbal affirmation.

Why pre-authorization matters

For a DME/HME business, payment happens on the basis of the accuracy of documents and records, including a document of authorization. If due diligence is not conducted on insurance coverage, there is a chance that the claim application will be delayed or even denied.

  • Pre-authorization enables the DME/HME business to know if the equipment payment is covered and who will pay for it.
  • Pre-authorization allows the DME/HME to access relevant information when preparing for claim submission.

How to go about it: Steps covered in pre-authorization

As a DME/HME business, pre-authorization may include the following steps:

  • Calling and checking for eligibility verification.
  • Following up on payer details, including documenting details of the follow-up call.
  • Ensuring a follow-up with the doctor, nurse, or healthcare service provider for written authorization on the equipment.
  • Ensuring patient records are in order, including patient information, insurance details, and prescription.
  • Your DME/HME provider details.
  • Details of the equipment prescribed and ordered.

It is important that DME/HME staff communicate with payers to check authorization status, keeping in mind time schedules of the payer. Your staff may also need to share information, when required, by the payer.

Once received, the authorization must be documented, along with the ending date for the authorization, in your business’ practice management system.

Building a sustainable DME/HME business

Most successful claim applications depend on comprehensive record keeping and a thorough review of insurance coverage, including changes that may affect the final payment. While most DME/HME businesses dedicate resources to ensure this is done, many claim applications may still be delayed or denied due to missing or incomplete information.

Outsourcing medical billing can offload some of the administrative work of a DME/HME so that it can detail resources and focus on incoming revenue and existing business, including pre-authorization verification. When you outsource medical billing requirements, you ensure that critical revenue cycle management is not affected at any time. Revenue Cycle Management (RCM) can be reliably outsourced with several benefits:

  • Allowing the DME/HME to more efficiently record, track, and store information.
  • Ensuring RCM processes are streamlined without compromising on patient safety, trust, and goodwill through a HIPAA-compliant provider of RCM services or medical billing services.
  • Helping the business fix problems with payments due by empowering collection efforts with the help of facts and data and streamlining RCM.

Next Steps

  • A DME partnership can provide the right assistance and expertise to reliably manage DME/HME billing requirements, including data management, such that the business can continue to focus on providing quality healthcare.
  • Email us at or call 781.503.9002 for a free session.
  • Engage with us on LinkedIn and Twitter.