What is Prior authorization (in a little more detail)?
Prior authorization, also known as pre-certification, prior approval, or pre-authorization, or pre-notification, is a process that insurance companies use to determine whether a patient is eligible to receive certain procedures, medications, or tests. This does not apply to emergency situations.
Prior authorization involves the physician submitting information securely online such as patient demographics, insurance information, and physician information to the insurer, followed by a review of the proposed treatment plan an employee of the insurer. Within 30 days of submitting a prior authorization request to the insurance company, one of three decisions will be rendered:
Approve or deny the request based on the current policy coverage specifications
Ask for additional information
An approved preauthorization is not a guarantee that the health insurance will cover the cost of care, but the absence of prior authorization allows an insurer to deny payment.
Not every medical service is on a particular insurer’s list of services that require prior authorization. Health plans have their own rules as to what services need prior authorization. Typically, high-cost medications and expensive procedures make the list for requiring prior authorization. If a service is on a list of services for which an insurance company requires prior authorization and prior authorization is not completed, then the insurance company may legally deny payment for the service. This is true even if the insurance company would have covered fees for a service if prior authorization had been completed before the service was rendered. If a procedure is completed without prior authorization, some insurance companies require, in their contract with the physician, that the physician bear the burden of the cost of that service.
Though the advertised goal of prior authorization is to ensure that health care is cost-effective, safe, necessary, and appropriate for each patient, the use of prior authorization can pose a challenge to care delivery. For example, if a medication prescribed for a patient with an ongoing chronic condition requires prior approval, it can delay treatment and slow the patient’s progress.
While the process of undergoing surgical care may be daunting in and of itself, and the financial aspects may be complicated and a source of additional concern, you may reach out to get some clarity to your questions. You may find help with your insurance company, the facility for your surgery, our clinic’s financial services (217)-366-1382.