Definition of Pre-Approval in Health Insurance

Without Pre-Approval, Your Insurer May Not Provide Coverage

Doctor helping patient
Doctor helping patient. Adam Berry/Stringer/Getty Images

Pre-approval is a requirement that your physician obtain approval from your health care provider before providing care. Without this prior approval, your health insurance provider may not provide coverage, or pay for, your medication or operation, leaving you to cover some, or all, of the costs out of pocket.

Some health insurers require pre-approval, also known as pre-certification, for certain types of healthcare services, such as surgery or hospital visits. This means that you or your doctor must contact your insurer to obtain their approval prior to receiving care, or else the insurer may not cover it. Not all services will require pre-approval, but if you are in doubt, it's best to contact your insurance company in advance of obtaining any type of health care.

Also Known As: Pre-certification. The concept of pre-approval is very similar to that of Prior Authorization.

There are several reasons that a health insurance provider would require pre-approval. 

1. The service or drug you’re requesting is truly medically necessary.

2. The service or drug follows up-to-date recommendations for the medical problem you’re dealing with.

3. The drug is the most economical treatment option available for your condition. For example, Drug C (cheap) and Drug E (expensive) both treat your condition. If your doctor prescribes Drug E, your health plan may want to know why Drug C won’t work just as well. If you can show that Drug E is a better option, it may be pre-authorized. If there’s no medical reason why Drug E was chosen over the cheaper Drug C, your health plan may refuse to authorize Drug E.

4. The service isn’t being duplicated. This is a concern when multiple specialists are involved in your care. For example, your lung doctor may order a chest CT scan, not realizing that, just two weeks ago, you had a chest CT ordered by your cancer doctor. In this case, your insurer won’t pre-authorize the second scan until it makes sure that your lung doctor has seen the scan you had two weeks ago and believes an additional scan is necessary.

5. An ongoing or recurrent service is actually helping you. For example, if you’ve been having physical therapy for three months and you’re requesting authorization for another three months, is the physical therapy actually helping? If you’re making slow, measurable progress, the additional three months may well be pre-authorized. If you’re not making any progress at all, or if the PT is actually making you feel worse, your health plan might not authorize any further PT sessions until it speaks with your physician to better understand why he or she thinks another three months of PT will help you.

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