By Dr. Steve Kim, Valer Co-Founder and CEO
This is Part 5 of our 10-part series examining the deep, interconnected complexities that keep prior authorization broken. While many hospital and health systems hope new regulation (CMS-0057-F) and AI will improve processes, the real barriers to progress lie in systemic challenges that span technology, workforce, regulation, and operations. These barriers won’t be eliminated by regulation, payer pledges, or today’s AI solutions—but providers have more control than they might think. Throughout the series, we’ll break down the entire prior auth landscape and include practical recommendations that can make a difference.
Your patient access team has navigated the maze of determining authorization requirements and submission portals. They’ve gathered all the necessary clinical documentation. The authorization request is ready to submit. But before they click send, they face a precision challenge that can derail everything: getting the exact provider and facility combination correct.
This isn’t about having “generally correct” information. Payers require exact matches to contracted provider-facility combinations, with precise National Provider Identifiers (NPIs) and Tax Identification Numbers (TINs). A single digit wrong, a formatting difference, or a misunderstanding about which facility was actually contracted can result in immediate denial—even when the clinical information is perfect and the patient clearly needs the service.
The stakes are high. These matching errors often don’t surface until after the service is rendered, when claims are denied and everyone discovers that the authorization—while approved—wasn’t actually valid for the specific provider-facility combination that delivered the care.
Challenge #1: Contracting Precision Requirements
Every payer maintains complex contracting relationships that specify exactly which providers can deliver services at which facilities under which circumstances. These contracts aren’t simple “in-network or out-of-network” designations of individual physicians, physician groups, hospitals, ambulatory surgery centers, imaging facilities, and other care delivery locations, but also can reflect directing of services to preferred providers and facilities for each payer.
When submitting a prior authorization, staff must identify and match to:
- The exact rendering provider as listed in the payer web portals (with correct NPI)
- The precise facility location listed in the payer web portals (with correct NPI and TIN)
- The contractual relationship between that provider and facility
- Whether this specific combination is in-network for the patient’s particular plan
A provider might have privileges at multiple facilities, but only be contracted with the payer at some of them. A facility might be in-network, but not for all providers who work there. The same organization might have multiple TINs, and using the wrong one triggers a denial even when everything else is correct.
The challenge intensifies when provider-facility relationships change. A physician might move their practice from one hospital system to another, or begin working at an additional outpatient location. These changes can take weeks or months to flow through payer systems, creating a window where staff submit authorizations based on current relationships that don’t yet exist in payer databases.
The solution: Implement verification processes that confirm contracted provider-facility combinations before submission, not after denial. Look for technology solutions that maintain current contracting data and can validate that your intended provider-facility match aligns with the payer’s contracted network for that specific patient. (Valer is also currently working on a project to ensure NPI provider accuracy across the board, to improve this key source of pain.)
Challenge #2: The Payer Substitution Problem
The complexity multiplies for services requiring both professional and facility authorizations—common scenarios for surgeries, advanced imaging, and many specialty procedures. Clinical teams often focus primarily on the professional component (the physician service), assuming the facility authorization will follow naturally.
But payers frequently have other plans. They may approve the professional component while directing the facility component to a different, typically lower-cost location. This substitution often happens without clear, prominent notification that makes the change obvious to everyone involved.
Here’s how this plays out in practice: A surgeon requests authorization for a procedure at Hospital A, where they have privileges and where the patient prefers to receive care. The payer approves the surgeon (professional component) but specifies that the facility authorization is only valid at Ambulatory Surgery Center B, which has a lower contracted rate.
The communication about this facility change might be buried in authorization documentation or portal messaging that the clinical team doesn’t see. The surgeon’s office, seeing “approved” for the professional component, proceeds with scheduling at Hospital A. The patient undergoes the procedure. Only when claims are processed does everyone discover that the facility authorization was never valid for Hospital A—resulting in a potential denial and unexpected patient liability.
This disconnect between clinical teams initiating authorizations and facility-based patient access teams has real consequences for patient care. Those consequences are ultimately the fault of labyrinthine systems. Physicians and their staff focus on getting the professional component approved and coordinating patient care. They may not realize they need to verify facility authorization separately, or may not have easy access to systems where they can check this information.
The solution: Establish clear workflows that separate professional and facility authorization verification, with explicit handoffs between clinical and facility teams. Implement technology that flags when payer approvals specify different facilities than originally requested, and create protocols for communicating these changes to all stakeholders before services are scheduled.
Challenge #3: Place of Service Precision
Beyond the provider-facility combination, payers also scrutinize the place of service (POS) designation—whether services are approved for outpatient, observation, or inpatient settings. These distinctions carry significant financial implications and clinical care differences, but they’re not always clearly specified or understood at the authorization stage.
The challenge is that place of service decisions can often conflict between what the provider’s assessment of what is appropriate care based on patient condition and clinical judgment and what the authorization POS specifications that are dictated by the insurance company as being outpatient or inpatient only services.
The solution: Build flexibility into authorization workflows that account for potential place of service changes, and establish rapid communication channels for obtaining updated authorizations when clinical circumstances require different care settings than originally approved.
Challenge #4: Data Naming and Format Misalignment
Even when staff have correct NPIs and TINs, authorization submissions can fail due to how provider and facility names are formatted. EHR systems store names according to clinical documentation conventions, while payer portals expect names formatted according to their own database standards.
Consider these variations for the same provider:
- EHR: “Steve Kim MD”
- Payer Portal 1: “Kim, Steve S”
- Payer Portal 2: “KIM, STEVE”
- Payer Portal 3: “Steven S. Kim, M.D.”
When staff copy provider information from the EHR and paste it into a payer portal, the format mismatch can trigger “provider not found” errors even though the NPI is correct. Staff then spend time reformatting names, trying different variations, and potentially submitting with incorrect information just to get past the portal’s validation requirements.
These seemingly minor formatting issues create real workflow friction. Staff waste time troubleshooting what should be straightforward data entry, and the constant trial-and-error process increases the likelihood of actual errors—selecting a similarly-named but incorrect provider or facility just to get the portal to accept the submission.
The solution: Use technology that normalizes provider and facility data across different payer formats, automatically translating between your EHR conventions and each payer’s specific requirements. This normalization should happen behind the scenes, not as a manual task for each submission.
The Hidden Costs of Getting It Wrong
Provider and facility matching errors carry costs that extend far beyond the immediate denial. When these errors aren’t discovered until after service delivery:
- Patient liability increases: Patients may face unexpected bills for services they believed were authorized
- Provider write-offs accumulate: Organizations absorb costs for services rendered under invalid authorizations
- Rework burden multiplies: Staff must retroactively appeal denials, gather additional documentation, and attempt to obtain corrective authorizations
- Patient satisfaction suffers: Surprise billing and payment disputes damage patient relationships and reputation
- Clinical team frustration grows: Physicians and care teams become increasingly cynical about authorization processes that seem designed to fail
Many of these errors are preventable with better data validation and verification processes—but most organizations lack the systems and workflows to catch them before services are delivered.
The solution isn’t trying harder—in addition to solving workforce gaps, it’s implementing automations that take as much of the guesswork and manual monitoring out of the process as possible.
Next up in Part 6: How opaque payer guidelines and fragmented clinical documentation create a trial-and-error system, where staff hunt through EHRs without clear guidance on what evidence will be deemed sufficient.
