Prior Authorization: Overview, Purpose, Process

Why some health insurers may deny a claim if you don't take this step

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Prior authorization in health care is a requirement that a provider (physician, hospital, etc.) obtains approval from your health insurance plan before prescribing a specific medication for you or performing a particular medical procedure. Without this prior approval, your health insurance plan may not pay for your treatment, leaving you responsible for the full bill.

Prior authorization is also known as precertification, predetermination, and pre-approval.

This article will explain what prior authorization in healthcare is, why and when health plans require prior authorization, and your options if a prior authorization request is denied by your health plan.

A doctor filling out a prescription
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Why Do Health Insurers Require Prior Authorization?

There are several reasons that a health insurance provider requires prior authorization. Your health insurance company uses a prior authorization requirement as a way of keeping healthcare costs in check.

By using prior authorization, your insurer wants to make sure that:

  • You really need it: The service or drug you’re requesting must be truly medically necessary.
  • It's recommended for your situation: The service or drug must follow up-to-date recommendations for the medical problem you’re dealing with.
  • It makes financial sense: The procedure or drug should be the most economical treatment option available for your condition. For example, Drug C (cheap) and Drug E (expensive) both treat your condition. If your healthcare provider 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 its use. Some insurance companies require step therapy in situations like this, meaning that they'll only agree to pay for Drug E after you've tried Drug C with no success. The same concept applies to other medical procedures. For example, your health plan may require prior authorization for an MRI, so that they can make sure that a lower-cost x-ray wouldn't be sufficient.
  • 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.
  • An ongoing or recurrent service is actually helping you: For example, if you’ve been having physical therapy for three months and your doctor is 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 healthcare provider to better understand why he or she thinks another three months of PT will help you.

What Are the Rules of Prior Authorization?

Health plans each have their own rules in terms of what services need prior authorization. In general, the more expensive the procedure, the more likely a health plan is to require prior authorization. But some services will require prior authorization under one health plan and not under another.

In effect, a pre-authorization requirement is a way of rationing health care. Your health plan is rationing paid access to expensive drugs and services, making sure the only people who get these drugs or services are the people for whom the drug or service is appropriate. The idea is to ensure that health care is cost-effective, safe, necessary, and appropriate for each patient.

Do I Need Prior Authorization in an Emergency?

If you need emergency medical care, most insurers do not require prior authorization. In some cases, they may do the prior authorization process after you get care (retroactive).

Prior authorization requirements are also controversial, as they can often lead to treatment delays and can be an obstacle between patients and the care they need. Particularly for patients with ongoing, complex conditions that require extensive treatment and/or high-cost medications, continual prior authorization requirements can hinder the patient's progress and place additional administrative burdens on physicians and their staff.

How Did the ACA (Obamacare) Affect Prior Authorization?

The Affordable Care Act, signed into law in 2010, mostly allows insurers to continue to use prior authorization as a way to control costs and ensure that patients are receiving effective treatment.

However, it prohibits non-grandfathered health plans from requiring prior authorization to see an OB-GYN and allows patients to pick their own primary care physician (including pediatricians or OB-GYNs). It also prohibits health plans from requiring prior authorization for emergency care at an out-of-network hospital.

The ACA also grants enrollees in non-grandfathered health plans access to an internal and external appeals process. Insurers have 15 days (or less, at state discretion) to respond to a non-urgent prior authorization request. If the insurer denies the request, the patient (usually working together with their healthcare provider) can submit an appeal, and the insurer has 30 days to address the appeal.

In addition, the Mental Health Parity and Addiction Equity Act of 2008, which was expanded under the Affordable Care Act, prohibits health plans from disproportionately applying prior authorization requirements to mental health care, compared with their requirements for medical/surgical benefits.

Many states have also imposed their own laws that limit the length of time insurers have to complete prior authorization reviews. Additionally, some states have electronic prior authorization requirements for medications, intended to make the process faster and more efficient. However, state health insurance regulations don't apply to self-insured employer-sponsored plans, as those are regulated at the federal level under ERISA instead.

How Do I Get a Prior Authorization?

If you need to get prior authorization for a healthcare service, there is a process that you'll need to follow. Here are the steps to getting prior authorization.

Talk to Your Provider's Office

The first thing you'll need to do to start the process of getting prior authorization is by contacting your provider's office. They will have someone there who handles prior authorization requests.

Once you find out who you need to talk to about getting prior authorization, the next step is to find out what they need from you. They can probably also give you a sense of what to expect during the process and what to do if your request is denied.

Fill Out Paperwork

You will probably be asked to fill out some forms that your provider's office will use to submit the request. A prior authorization form will include information about you, as well as your medical conditions and needs.

It's very important that you fill out these forms completely and make sure that the information is accurate. If there is information missing or wrong, it could delay your request or result in denied prior authorization.

Get Organized

As you're gathering and completing paperwork as part of your prior authorization request, make sure that you keep track of everything. You may need to refer back to the paperwork later if the request is denied.

It's also helpful to have a record of approved prior authorizations in case you need to request another one in the future.

Keep Track of Dates

You may have deadlines for providing information and your provider's office will probably be working on a timeline to submit documents during the prior authorization process.

Your provider's office will help keep you up to date, but it's also helpful if you know when things are due so you can set reminders for yourself.

Have a Plan If You're Denied

Talk to your provider and their office about what you will do if your prior authorization request is denied. You and your provider may choose to appeal the decision if you think the prior authorization denial was not justified.

If your prior authorization request is denied, the first step is to find out why. If a simple error was to blame, it might be a quick fix.

After you've checked all the paperwork that was submitted to make sure nothing is missing and all the information is correct, you might want to see if there are other things you could add that would help prove the care you're asking for is needed.

For example, your provider might know of research that would be helpful to include.

Summary

Prior authorization is a process by which a medical provider (or the patient, in some scenarios) must obtain approval from a patient's health plan before moving ahead with a particular treatment, procedure, or medication.

Different health plans have different rules in terms of when prior authorization is required. But if prior authorization is required and is not obtained, the health plan can reject the claim—even if the procedure was medically necessary and would otherwise have been covered.

A Word From Verywell

If your doctor recommends a particular procedure or treatment, it's important to check with your health plan to see if prior authorization is necessary.

Your doctor will likely submit the prior authorization request on your behalf, but it's in your best interest to follow up and make sure that any necessary prior authorization has been obtained before moving forward with any non-emergency procedure.

This will help to reduce the chances of a claim denial and an unexpected medical bill. And it also helps to ensure that the medical care you're receiving is cost-efficient and effective.

Frequently Asked Questions

  • Why is prior authorization important?

    Insurance providers use prior authorization as a way to make sure that a specific medical service is really necessary and, essentially, worth the cost. Ideally, it should help prevent too much spending on care that isn't really needed.

  • How can I speed up my prior authorization?

    Telling your provider's office you need prior authorization as soon as possible, getting organized, keeping track of due dates, and making sure all the paperwork you need to fill out is accurate are some of the best ways to make the process go smoothly.

  • How long does prior authorization take for medicine?

    The prior authorization process for medicine differs by state and the urgency of treatment. For example, in Virginia, the response time for non-urgent prescription medicine is two business days, while an urgent submission must be returned within 24 hours (including weekend hours).

  • Does Medicare require prior authorization for surgery?

    Medicare does not require prior authorization for an emergency that calls for immediate surgery. In many cases, prior authorization is also not needed for elective surgery, or when a procedure is scheduled in advance. This is true for both Medicare Part A and Part B.

  • What does it mean when a drug needs prior authorization?

    It means your insurer wants to make sure that the medication is really needed and that it's the best option for your situation. In some cases, your insurer might agree to give you a short-term supply of a medication (for example, one or three months) while they are making their decision.

  • Why do prior authorizations get denied?

    An insurer will deny a request if they don't think the medical service is necessary or the best option given the circumstances. Sometimes a denial is due to insufficient evidence or missing information in an approval request. You can always submit an appeal.

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14 Sources
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