Prior Authorization
Prior authorization is a requirement by your health insurance or plan for certain services before you receive them, except in an emergency, to check if the plan covers the proposed care and if it is medically necessary, safe, and cost-effective.
What is a Prior Authorization?
Prior authorization is an approval from a health plan that may be required before certain treatments or medications are covered. It serves as a check to ensure that the proposed care is medically necessary, safe, and cost-effective, and that it is covered under the patient's plan. Without prior authorization, a health plan may not pay for the treatment or medication, with emergency care being a common exception.
The process typically involves a healthcare provider submitting a request with the necessary information to the patient's health plan. The insurance company then reviews the request, often with input from clinical pharmacists and medical doctors, and will either approve, deny, or ask for more information. This process can help reduce the cost of expensive treatments by requiring lower-cost alternatives first, and can also help avoid potentially dangerous medication combinations or unnecessary treatments.
What is the difference between a Prior Authorization and Utilization management?
Prior authorization is a specific type of utilization management. While utilization management encompasses various strategies to manage healthcare costs and quality, prior authorization specifically focuses on requiring approval from a health plan before certain treatments or medications are covered.
Prior authorization is a specific mechanism within the broader category of utilization management.
Utilization management is a comprehensive approach to ensure medical necessity, appropriateness, and cost-effectiveness of care.
Prior authorization is the process of obtaining approval from a health plan before receiving specific treatments or medications.
What are examples of a Prior Authorization?
A patient's doctor requests a brand-name medication that has a lower-cost generic alternative. The health plan may require prior authorization to ensure the patient tries the generic first.
A doctor recommends a new, expensive treatment. The health plan requires prior authorization to verify the medical necessity and cost-effectiveness of the treatment before approving coverage.
A healthcare provider prescribes a medication that could have dangerous interactions with other medications the patient is taking. Prior authorization ensures the health plan reviews for potential combinations before approval.
Let's review your payer contracts side-by-side with the market.
Bring your top billing codes and we'll show you how you compare to your peers in 15 minutes or less.