🇺🇸United States

Unpaid therapy visits when pre-authorization is missed or mishandled

3 verified sources

Definition

Physical, occupational, and speech therapy often require pre-authorization; if it is not secured or renewed correctly, insurers are under no obligation to pay and the practice or patient is left with the full bill. This leads to services already rendered that are either written off or never collected.

Key Findings

  • Financial Impact: Commonly 10–20 denied visits per month in a small practice; at ~$100–$150 per visit this is ~$1,000–$3,000/month ($12,000–$36,000/year) in preventable lost revenue.
  • Frequency: Daily
  • Root Cause: Front desk and therapists fail to obtain or renew authorizations on time, submit incorrect CPT/diagnosis codes, or do not understand each plan’s specific pre-authorization rules, so payers legally deny payment for otherwise valid care.[3][4]

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Physical, Occupational and Speech Therapists.

Affected Stakeholders

Front desk/registration staff, Billing specialists, Physical therapists, Occupational therapists, Speech-language pathologists, Practice owners/clinic managers

Deep Analysis (Premium)

Financial Impact

$1,500-$2,500/month from Medicaid pre-auth gaps; annual impact $18,000-$30,000 • $1,500-$3,000/month in denied claim write-offs (10-20 visits × $100-$150); admin rework on appeals • $100-$300/month in SNF pre-auth gaps (lower impact due to pre-funded model, but still real)

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Current Workarounds

Authorization details, claim numbers, and attorney/adjuster approvals are stored in free-form EHR notes and separate spreadsheets, with staff chasing faxes, letters, and emails and relying on memory to confirm that treatment has truly been authorized. • Authorization status is tracked with SNF census reports, shared spreadsheets, and hand-annotated therapy schedules, with therapists relying on memory and occasional checks of payer portals to ensure coverage is active. • Excel spreadsheet with manual tracking, phone calls to insurance, WhatsApp reminders to therapists, paper authorization log

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Expired or exhausted authorizations leading to denied or underpaid claims

For a clinic with 200+ active patients on authorization, even 5–10 visits per month beyond limits at $100/visit means ~$500–$1,000/month ($6,000–$12,000/year) lost; multi-site groups see proportionally larger losses.

Labor-intensive manual pre-authorization and verification work

If each pre-auth averages 20–30 minutes of staff time at ~$20/hour fully loaded, and a mid-sized clinic processes 200+ authorizations per month, this is ~$1,300–$2,000/month in labor cost ($15,000–$24,000/year) just to move paper.

Claim denials and rework due to pre-authorization errors

If 5–10% of therapy claims are denied for authorization/medical-necessity issues and half require 15–30 minutes of staff rework, a clinic submitting $100,000/month could see several thousand dollars delayed and 20–40 staff hours/month in rework cost.

Delays in starting therapy and prolonged time-to-cash from slow payer approvals

For a clinic with $80,000–$120,000 in monthly insurance revenue, adding even 10–15 AR days due to pre-auth delays can lock $25,000–$50,000 in working capital at any time, raising borrowing needs and interest costs.

Empty appointment slots and lost billable hours from authorization-related scheduling gaps

If each therapist loses even 1–2 billable hours per week due to authorization-related cancellations at $100/hour, a 5-therapist clinic loses ~$2,000–$4,000/month ($24,000–$48,000/year).

Poor therapy scheduling and care-plan decisions due to incomplete benefit and authorization visibility

Misaligned care plans can cause hundreds of non-covered visits per year (lost revenue) or underutilization of authorized visits worth tens of thousands of dollars in missed billable services for a multi-provider clinic.

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