Prior authorization helps both patients and providers alike. But what is a prior authorization exactly? In short, it’s a method insurance companies employ to determine if they will cover a certain medical service.
Despite its seeming complexity, understanding how authorization works is simple and essential for accessing the necessary medical treatment. From its function to its acquisition, this article will cover all the bases on prior authorization.
Key Takeaways
- Prior authorization is a process that health care providers must go through before providing certain medical treatments or services to their patients.
- Insurance companies or other payers require this to manage costs and ensure that the treatments or services are medically necessary and appropriate.
- The information required for prior authorization can include patient information, treatment/service info, supporting documents, and cost estimates.
- Types of health care services requiring prior authorization include specialty medications, diagnostic imaging, elective surgeries, physical therapy, and durable medical equipment.
- Obtaining prior authorization involves familiarizing oneself with the insurance policy; identifying the procedure/service requiring it; getting a referral from the doctor; submitting the request; following up with the insurer; preparing an appeal if needed.
What Does Prior Authorization Mean?
Prior authorization or precertification is a process that health care providers have to go through before they can provide certain medical treatments or services to their patients. Insurance companies or other payers require this to manage costs and ensure that the treatments or services are medically necessary and appropriate before they agree to cover them.
Basically, the provider submits a request to the insurance company or payer. It includes all the fine details about the treatment or service being requested.
For example, supporting documents like medical records, test results, and notes from health care providers are needed. Afterward, the insurance company examines your health plan and decides whether to approve or deny the request.
What Documents Are Required for Prior Authorization?
The information required for prior authorization can differ depending on the requested treatment or service and which insurance company or payer is involved. It’s a bit of a hassle, but it’s important to ensure health care costs stay reasonable and necessary treatments are covered.
When it comes to prior authorization programs, there are a few key pieces of information that health care providers need to include in their requests.
- Patient information: First up is patient information, like your name, date of birth, insurance info, and any other important medical history details.
- Treatment or service information: Next, providers must give the lowdown on the treatment or service they’re requesting, including why and how it’ll be done.
- Supporting documentation: To back up their request, providers should also include supporting documents like medical records, test results, and notes from other health care professionals.
- Cost information: Providers need to give an estimated cost for the treatment or service, along with any other financial details that might be relevant. It’s all about ensuring the treatment or service is necessary and worth the expense for the patient and the insurance company or payer.
Furthermore, the American Medical Association (AMA) has called for standardization across insurers’ prior authorization processes. They also suggest developing clinical recommendations backed by research to encourage the use of prior authorization.
Additionally, the AMA recommends that health insurers be open and transparent about their prior permission policies, including the pharmacy drugs and services needed and the criteria for granting it.
The AMA is pushing for these reforms to lessen the administrative burden on doctors and hospitals while improving the prior authorization process and ensuring that patients get the treatment they need in a timely manner.
Why Prior Authorizations Are Required
While it may not always be fun, prior authorizations are a key part of ensuring that everyone gets the care they need when they need it while also controlling health care costs. On that note, here are some key reasons why prior authorizations are required:
Cost Control
For starters, prior authorizations can help keep health care costs in check by ensuring only the necessary and appropriate treatments are given the green light.
This helps avoid unnecessary expensive medical procedures and drugs that can hike up the cost of health care for everyone.
Quality Control
Think of it this way. Prior authorizations are like a safety net, ensuring patients receive the right treatment for their health issues.
By requiring health care providers to obtain approval first, insurance companies help to avoid unnecessary treatments that may not be effective or safe for the patients.
Fraud Prevention
It’s no secret that health care frauds are on the up and up these days. It’s a serious problem when providers bill insurance companies for services that were never provided to patients. That’s where prior authorizations come in — they’re actually really helpful in preventing this type of fraud.
When insurance companies require prior authorization, they make sure that providers get approval before billing for health care services.
This extra step can help detect and prevent fraudulent billing practices by ensuring providers only bill for patient services.
Safety
Prior authorizations safeguard patients, ensuring they get the appropriate treatment tailored to their unique needs while minimizing potential risks.
It’s an important step in ensuring patients are carefully assessed and supervised before receiving treatment so that any potential issues can be identified and addressed promptly.
Communication
Prior authorization allows everyone involved, including patients and clients, to collaborate and ensure patients receive the best care possible. This ensures that the health care system is transparent and accountable and patients receive the care they need promptly and efficiently.
Types of Health Care Services That Require Prior Authorization
Medical necessity and appropriate use of health care resources are prioritized by insurance companies when requiring prior authorization for specific health care treatments. Below are some health care treatments that often need prior approval from insurance companies and why insurance providers require them.
Specialty Medications
Cancer, MS, autoimmune disorders, and hepatitis C are just a few examples of complex diseases treated by specialty medications.
Due to the high cost of these drugs, insurance companies often need prior permission from the patient. This is done to prevent the unnecessary abuse of the drug.
Diagnostic Imaging
Medical imaging tests may put patients at risk of radiation exposure and cost a lot of money. Insurance companies require prior authorization to guarantee that the requested radiologic tests and treatments are necessary for patient care and that no less costly or hazardous alternatives are available.
Elective Surgeries
Surgical operations not deemed life-or-death emergencies are known as elective surgeries, including hip replacements, cosmetic surgery, and bariatric surgery. Insurance companies typically demand prior authorization for these procedures to ensure they are essential.
Physical Therapy
Recovering from an injury or sickness is made easier with the support of physical therapy or physiotherapy. Insurance companies often want prior authorization for therapy to guarantee its medical necessity and ensure service quality.
Durable Medical Equipment
Wheelchairs, oxygen tanks, and hospital beds are only a few examples of long-lasting but also high-priced and routinely serviced medical equipment. Insurance companies seek prior authorization to guarantee the equipment is needed for medical reasons and that there are no better or cheaper options.
How to Obtain Prior Authorization
Obtaining prior authorization before undergoing treatment may be lengthy and convoluted, yet it is often necessary. To get the all-important go-ahead, follow these simple measures:
Know Your Insurance Policy
The first thing you should do is go over your insurance policy and familiarize yourself with its coverages. Knowing the specifics and coverages of your insurance plan regarding prior authorization requirements is crucial.
Identify the Procedure or Service That Needs Prior Authorization
Specify the treatment or service that requires prior authorization. Knowing your insurance coverage helps determine whether a certain service or treatment must be pre-authorized.
This data is often available through the insurer’s website or by calling their toll-free customer care number.
Get a Referral From Your Doctor
Prior authorization sometimes requires a reference from your primary care physician or a referral from a specialist.
Speak to your doctor about why you need the treatment or procedure. Have them provide the paperwork to back up your request for prior authorization.
Submit the Prior Authorization Request
The next step is to send your insurer a request for prior authorization after you have gathered all the essential information. Your insurance company may allow you to do this over the phone or online.
Follow up with Your Insurer
To ensure your request has been received and handled, following up with your insurer once you have submitted it is crucial. Typically, you may call or check online to see where your request stands.
Be Prepared to Appeal
If your request for prior permission is refused, you should be ready to appeal. In such a circumstance, you have the option to file an appeal. For one, you may substantiate your original claim with additional documentation.
Frequently Asked Questions
What Does Prior Authorization Mean in Health Insurance?
Health insurance companies employ a process called “prior authorization” to decide whether or not they will pay for a planned medical operation, drug, or service. Doctors need prior authorization from their patients’ insurance companies to deliver certain services or prescribe certain medicines.
Why Is It Called Prior Authorization?
Prior authorization refers to approval before a service is provided. Insurance firms employ this procedure to keep medical costs down to ensure that only essential and suitable treatments are delivered and to prevent fraud and misuse.
Who Does a Prior Authorization Need to Come From?
The health care professional seeking the treatment or medicine must submit the prior authorization, and a patient sometimes initiates the request. They’ll have to explain in great detail why the service or prescription drug is required for the patient’s health. The request will be approved or denied based on the insurance company’s medical rules and requirements.
What Does Authorization Mean in Medical Billing?
Verifying if a medical treatment or operation is covered by a patient’s insurance plan is known as “authorization” in the medical billing industry. The health care provider will bill the insurance company once the service has been provided. If the procedure is approved, coverage will be provided according to the policy’s guidelines. The patient might be accountable for payment in full if treatment was given without prior authorization.
Final Thoughts
So what is a prior authorization? In a nutshell, prior authorization verifies that a health care provider’s proposed treatments or procedures initiated either by the patients or by health care providers are both covered by insurance and are essential.
While the prior authorization procedure is a bother, it helps keep health care expenses down and ensures that resources are used effectively.
To get the most out of your health insurance, you must always be familiar with your clinical guidelines. If you’re a patient and have questions about prior authorization, talk to your health care provider or insurance company for more information.
Sources
- “How to Get Prior Authorization for Medical Care.” American Academy of Dermatology, 2019, www.aad.org/public/fad/prior-authorization.
- “Why Do I Need a Prescription Prior Authorization? | Bcbsm.com.” Blue Cross Blue Shield of Michigan, 2023, www.bcbsm.com/index/health-insurance-help/faqs/plan-types/pharmacy/why-do-i-need-prior-authorization-for-prescription-drug.html.
- Drella, Meghann. “Prior Authorizations – Challenges and Solutions.” Www.outsourcestrategies.com, 13 Apr. 2021, www.outsourcestrategies.com/blog/prior-authorizations-current-challenges-and-solutions/
- “Prior Authorization Practice Resources.” American Medical Association, 2023, www.ama-assn.org/practice-management/sustainability/prior-authorization-practice-resources.
- Bihari, Michael. “Prior Authorization Is a Way to Make Sure Health Care Is Covered.” Verywell Health, 2019, www.verywellhealth.com/prior-authorization-1738770.
- “How to Obtain Prior Authorizations.” JDRF, 2023, www.jdrf.org/t1d-resources/living-with-t1d/insurance/how-to-obtain-prior-authorization/.
- “Healthcare Services Requiring Prior Authorization | Physicians Health Plan.” Www.phpni.com, www.phpni.com/prior-authorization.