Are Prior Authorizations for Skilled Nursing Really Necessary? What Covid19 Has Taught Us

Are Prior Authorizations for Skilled Nursing Really Necessary? What Covid19 Has Taught Us

Due to the Covid19 pandemic, many insurers waived the need for the initial prior authorizations for patients at skilled nursing facilities, which has us questioning, were these  auths really beneficial in the first place? Watch Steve Shain, COO of LTC Contracting, discuss prior authorizations for skilled nursing facilities.

Initial Prior Auths: Success or Excess?

Now what I want to talk about today is a change that was going on with the Prior Authorizations because of Covid19.

If you’re working in a Nursing facility you’re very familiar with this. Nursing facilities usually are taking patients from Hospitals and the insurance companies realized that the hospitals were overloaded with admissions and they were over capacity, and therefore in order to ease that transfer over from hospitals to nursing homes the insurance companies temporarily allowed for the waiver of Prior Authorizations.

So typically, you would need to get permission – clinical permission – from the Insurance company before treating a patient in a nursing home, taking them from a hospital to do so. But during Covid-19, the Insurance companies waived that and they let you just take the patient as long as you notify them that the patient was now in your facility.

So as of June 1st, most insurance companies stopped that waiver and right now are back to regular programming. There are some insurance companies, such as Cigna, which are keeping this rolling thru July, which is really impressive and really nice of them. But for the most part everything is really getting cut just now, June 1st.

And it is very understandable why Insurance Companies have these policies for Prior Authorization in place. Because, Number 1: they want to make sure their members are getting the right level of care and the right type of care, and therefore they want to make sure that they can monitor and help make that decision , where the patients best care would be given. And, Number 2: of course to keep their costs down in order to make sure that this is the most cost effective location for their member.

But I wonder, and this is for all the insurance company reps that may be watching this, I wonder if you look at the data in 3,4,5 months from now and look back and see how many times during this period of time -whether it was March, April, May- that you did have members that were, even though the hospital thought it was the right level of care , even though their family and they felt it was the right level of care, but for some reason they were placed in the wrong level of care. And how many of these were really not cost-effective admissions?

I wonder, because on the other side of the coin you have so much extra paperwork and so much cost on the Insurance company side for case managers. And the pressure that goes along with it on the hospital and skilled nursing facility side to get those authorizations in place quick enough in order to make sure the member has a smooth transition over to the next level of care.

I wonder if all that is really worth it, but I’m curious to see. And hopefully with time we will find out those answers.

Thank you so much for watching!


Steve Shain is the Chief Operating Officer of LTC Contracting.

LTC Contracting guides providers through licensure and business setup procedures and ensures compliance with all regulations, whether the providers are opening new organizations or adding new service lines to their existing businesses. LTC Contracting’s services also include getting providers credentialed and on the Managed Care Organizations’ (MCOs’) networks.