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Authorize Service

Authorization Determination

Description

The Authorize Service business process encompasses both a pre-approved and post-approved service request. This business process focuses on specific types and numbers of visits, procedures, surgeries, tests, drugs, therapies, and durable medical equipment. Its primary use is in a fee-for-services setting. Prior authorization of a service request is a care management function and begins when a care manager requests a service request by mail, facsimile, telephone, or Accredited Standards Committee (ASC) X12 278 Health Care Services Review Information request transaction. The care manager evaluates requests based on state rules for prioritization such as urgency and type of service/taxonomy (e.g., durable medical equipment, speech, physical therapy, dental, and out-of-state), validates key information, and ensures that requested service is appropriate and medically necessary. After review, staff approves, modifies, denies or suspends for additional information the service requests. The State Medicaid Agency (SMA) sends the appropriate response information for the outbound ASC X12 278 Health Care Services Review Response transaction to the provider using the Send Outbound Transaction. NOTE: MITA contains three (3) different authorization business processes: 1. Authorize Service - the standard process of prior authorization of services. 2. Authorize Treatment Plan - the approval of a treatment plan prepared by a care management team in a care management setting. 3. Authorize Referral - specifically the approval of a referral to another provider, requested by a primary care physician. A post-approved service request is an editing/auditing function that requires review of information after the service is complete. A review may consist of verifying documentation to ensure that the services were appropriate and medically necessary, and validating provider type and specialty information to ensure alignment with agency policies and procedures. Post-approved validation typically occurs in the Process Claim or Process Encounter business processes. NOTE: This business process is part of a suite that includes Service Requests for different service types and care settings including Medical, Dental, Drugs, and Off-label use of drugs, Social Service, Experimental Treatments, Out-of-State Services, and Emergencies.

Business Process Template

Trigger events
Environment-based
  • Provider submits a request for service in accordance with state policy.
  • Provider submits additional information for existing service authorization request.
Interaction-based
  • Receive service request from Health Information Exchange (HIE) via ASC X12 278 Health Care Services Review Request and Response transaction.
  • Receive service request from requestor via ASC X12 278 Health Care Services Review Request and Response transaction.
Results
  • Service authorization response sent to requestor.
  • Alert to send service information to requestor via ASC X12 278 Health Care Services Review Request and Response transaction.
  • If applicable, alert sent to submitter via ASC X12 TA1 Interchange Acknowledgment, 997 Functional Acknowledgment, 999 Implementation Acknowledgment and/or the 824 Application Advice transaction(s) per Trading Partner Agreement (TPA).
  • Alert sent to Manage Applicant and Member Communication to send notification of authorized service response.
  • Alert sent to Manage Case Information business process for purposes of responding to provider or member inquiries about the status of service request or a provider or member filing of a grievance or an appeal about the service authorization response.
  • Tracking information as needed for measuring performance and business activity monitoring.
Business process steps
  • 1. START: Receive service authorization request from authorized provider.
  • 2. Validate information submitted is correct and as complete as possible. Information complies with syntax criteria and requestor has completed all required fields. a. If applicable, alert sent to submitter via ASC X12 TA1 Interchange Acknowledgment, 997 Functional Acknowledgment, 999 Implementation Acknowledgment and/or the 824 Application Advice transaction(s) per Trading Partner Agreement (TPA). END: Business process stops.
  • 3. Validate that the provided information is authentic.
  • 4. Assign a tracking number.
  • 5. Prioritize Service Authorization Request.
  • 6. Validate the following:
  • 7. Member eligibility - for social service model, this entails assessing member’s health, functional, and socio-economic status
  • 8. Requesting and servicing providers
  • 9. Service coverage and referral requirements
  • 10. Diagnosis code
  • 11. Procedure code/or procedure groupings
  • 12. Check for medical or functional necessity and appropriateness.
  • 13. Check against current service authorizations for duplicates.
  • 14. Validate completeness of supporting documentation.
  • 15. Deny based on insufficient/erroneous information or authorization for service not medically necessary. Go to step 13.
  • 16. Suspend the authorization request based on need for additional information. Go to step 13.
  • 17. Approve service authorization request (this includes approved with modifications.
  • 18. Send alert to send service authorization to requestor via ASC X12 278 Health Care Services Review Request and Response transaction.
  • 19. END: Send alert to notify member and requesting provider of service authorization determination.
  • Alternate Path: For the authorization of some services, States may use the post-approval rather than the prior authorization business process. The post-approval business process includes all steps listed above, but process executes in a different order depending on state rules.
Predecessor processes
Successor processes
Shared data
  • Member data store including demographic information
  • Provider data store including provider network Information
  • Health Information Exchange (HIE) data store including health information, clinical record, and clinical data
  • Plan data store including health benefits information
  • Claims data store including adjudication information
Constraints

The authorize service request information will conform to the format and content in accordance with state-specific reporting requirements, e.g., using a HIPAA Transaction Standard Companion Guide.

Failures
  • The SMA receives incomplete service authorization request.
  • Requestor (provider) is not eligible for enrollment or does not have authority to make service authorization request for particular service.
  • Member is not eligible for services.
Performance measures
  • Time to complete the process: e.g., Real Time response = within __ seconds, Batch Response = within __ hours
  • Accuracy with which service authorizations are approved or denied = __%
  • Consistency of decisions in approving or denying service authorizations = __%
  • Error rate = __% or less

Source: CMS MITA 3.0 Business Process Template, Care Management BPT.pdf, pages 18-21.

Business Capability Model (11 questions)

Each capability question defines five maturity levels, from Level 1 through Level 5.

Business Capability Descriptions

Is the process primarily manual or automatic?
  1. LEVEL 1The process consists primarily of manual activity to accomplish tasks. SMA receives authorize service request primarily via paper, telephone, or facsimile. SMA responses to authorize service request via paper, telephone, or facsimile.
  2. LEVEL 2SMA uses a mix of manual and automatic processes to accomplish tasks. Authorize Service request is a mix of paper, telephone, facsimile and electronic media. SMA responses to authorize service request via paper, telephone, facsimile, or electronic media.
  3. LEVEL 3SMA automates process to the full extent possible within the intrastate.
  4. LEVEL 4SMA automates process to the full extent possible within the region.
  5. LEVEL 5SMA automates process to the full extent possible across the nation.
Does the State Medicaid Agency use standards in the process?
  1. LEVEL 1SMA focuses on meeting compliance thresholds for state and federal regulations using state-specific standards. SMA develops its own unique paper forms to support this process; there may be different forms per provider type.
  2. LEVEL 2SMA applies a mix of HIPAA and state-specific standards. SMA adopts the Accredited Standards Committee (ASC) X12 277 Health Care Information Status Notification and 278 Health Care Services Review Information transactions. Web portals may support error free submissions with information validations, member-side edits, and pre-populated fields, thereby facilitating the process.
  3. LEVEL 3SMA adopts MITA Framework, industry standards, and other nationally recognized standards for intrastate exchange of information.
  4. LEVEL 4SMA adopts MITA Framework, industry standards, and other nationally recognized standards for clinical and regional information exchange.
  5. LEVEL 5SMA adopts MITA Framework, industry standards, and other nationally recognized standards for national information exchange.
How easy is it to change the business rules of Authorize Service?
  1. LEVEL 1Manual rule changes require many business days for approval and implementation.
  2. LEVEL 2Although there may be some automation of standardized business rules definitions, changes and maintenance are labor intensive.
  3. LEVEL 3Adoption of the separation of standardized intrastate business rules definitions from core programming, available in both human and machine-readable formats.
  4. LEVEL 4Adoption of the separation of regionally standardized business rules definitions from core programming, available in both human and machine-readable formats.
  5. LEVEL 5Adoption of the separation of nationally standardized business rules definitions from core programming, available in both human and machine-readable formats.
How does the State Medicaid Agency collaborate with other agencies or entities in performing the process?
  1. LEVEL 1Very little collaboration occurs with other agencies to standardize information exchange or business tasks.
  2. LEVEL 2SMA collaborates with other agencies and entities to adopt HIPAA standards and Electronic Data Interchange (EDI) transactions.
  3. LEVEL 3SMA collaborates with other intrastate agencies and entities to adopt national standards, and to develop and share services.
  4. LEVEL 4SMA collaborates with other regional agencies and entities to adopt national standards, and to develop and share including clinical information.
  5. LEVEL 5SMA collaborates with agencies and entities for national (and international) interoperability improvements that of routine operations.

Business Capability Quality: Timeliness of Process

How timely is this end-to-end process?
  1. LEVEL 1Process meets threshold or mandated requirements for timeliness (i.e., the process achieves results within the time specified by law or regulation).
  2. LEVEL 2Process timeliness improves through use of automation. Timeliness exceeds legal requirements.
  3. LEVEL 3Timeliness improves via state and federal collaboration, use of information sharing, standards, and regional information exchange hubs. Process completes in less than 60 seconds.
  4. LEVEL 4Information is available in near real time. Processes that use clinical authorize determination information result in immediate action, response, and results. SMA has regional interoperability. Process completes in less than 30 seconds.
  5. LEVEL 5Information is available in real time. Processes improve further through connectivity with other States and with federal agencies. Most processes execute at the point of service. Results are almost immediate.

Business Capability Quality: Data Access and Accuracy

How accurate is the information in the process?
  1. LEVEL 1Use of direct data entry for information collection is manually intensive and susceptible to inconsistent or incorrect information. Stakeholders are unable to rely on information for decision-making. Information
  2. LEVEL 2HIPAA standard transactions improve accuracy of information but the decision-making process may be erroneous or misleading. Accuracy is higher than at Level 1.
  3. LEVEL 3Automation of information collection increases the reliability of SMA’s internal information. External sources of information use MITA Framework for information exchange. Decision-making is automatic using standardized business rules definitions. Accuracy is 95% or higher.
  4. LEVEL 4Automation of information collection increases the reliability of regional sources of information. SMA adopts MITA Framework for information exchange by regional agencies. Decision-making is automatic using regional standardized business rules definitions. Accuracy rating is at 99% or higher.
  5. LEVEL 5SMA adopts MITA Framework for national information exchange. Decision-making is automatic using national standardized business rules definitions. Accuracy rating is at 99% or higher.
How accessible is the information in the process?
  1. LEVEL 1SMA stores information in disparate systems including paper storage and obtains information manually.
  2. LEVEL 2SMA stores information in disparate systems, but automation and HIPAA standards increase accessibility over Level 1.
  3. LEVEL 3SMA obtains information easily and exchanges with intrastate agencies and entities based on MITA Framework and industry standards. Accessibility is greater than Level 2.
  4. LEVEL 4SMA obtains information easily from regional agencies and entities. Accessibility is greater than Level 3.
  5. LEVEL 5SMA obtains information easily and exchanges with national agencies and entities. Accessibility is greater than Level 4.

Business Capability Quality: Cost Effectiveness

What is the cost to support the process to the benefits of the result?
  1. LEVEL 1High relative cost due to low number of automatic, standardized tasks.
  2. LEVEL 2Automation improves process and allows focus on exception resolution, improving cost effectiveness ratio over Level 1.
  3. LEVEL 3SMA adopts MITA Framework, industry standards, and other nationally recognized standards further improving cost effectiveness ratio over Level 2.
  4. LEVEL 4SMA adopts MITA Framework, industry standards, and other nationally recognized standards for regional information exchange improving cost effectiveness ratio over Level 3.
  5. LEVEL 5SMA adopts MITA Framework, industry standards, and other nationally recognized standards for national (and international) information exchange. SMA increases cost effectiveness ratio over level 4.

Business Capability Quality: Effort to Perform; Efficiency

How efficient is the process?
  1. LEVEL 1Process is labor intensive. There is wasted effort or expense to accomplish tasks. Process meets minimum state process guidelines and SMA performance standards. Efficiency is low.
  2. LEVEL 2Automation and state standards increase productivity. Efficiency is higher than Level 1.
  3. LEVEL 3SMA adopts MITA Framework, industry standards and information exchange with intrastate agencies and entities improving efficiency to 95% or higher.
  4. LEVEL 4SMA adopts MITA Framework, industry standards and information exchange with regional agencies and entities improving efficiency to 98% or higher.
  5. LEVEL 5SMA adopts MITA Framework, industry standards and information exchange with national agencies and entities improving efficiency to 98% or higher.

Business Capability Quality: Accuracy of Process Results

How accurate are the results of the process?
  1. LEVEL 1Manual processes result in greater opportunity for human error. Accuracy is low.
  2. LEVEL 2Automation and standardized business rules definitions reduce error and improve accuracy above Level 1.
  3. LEVEL 3SMA adopts MITA Framework, industry standards and information exchange with intrastate agencies and entities improving accuracy to 90% or higher.
  4. LEVEL 4SMA adopts MITA Framework, industry standards and information exchange with regional agencies and entities improving accuracy to 98% or higher.
  5. LEVEL 5SMA adopts MITA Framework, industry standards and information exchange with national agencies and entities improving accuracy to 98% or higher.

Business Capability Quality: Utility or Value to Stakeholders

Does the business process satisfy stakeholders?
  1. LEVEL 1Stakeholders lack confidence in information negatively affecting stakeholder satisfaction with the process.
  2. LEVEL 2Automation and standardization provides clear and useful information. Stakeholder satisfaction is greater than Level 1.
  3. LEVEL 3SMA adopts MITA Framework, industry standards and information exchange with intrastate agencies and entities improving stakeholder satisfaction to 90% or higher. SMA uses survey or questionnaire for information collection.
  4. LEVEL 4SMA adopts MITA Framework, industry standards and information exchange with regional agencies and entities improving stakeholder satisfaction to 95% or higher.
  5. LEVEL 5SMA adopts MITA Framework, industry standards and information exchange with national agencies and entities improving stakeholder satisfaction to 98% or higher.

Source: CMS MITA 3.0 Business Capability Model, Care Management BCM.pdf, pages 45-53.

Other Care Management processes

Authorize ReferralAuthorize Treatment PlanEstablish CaseManage Case InformationManage Population Health OutreachManage RegistryManage Treatment Plan and OutcomesPerform Screening and Assessment