What is preauthorization and when is it commonly required?

What is preauthorization and when is it commonly required?

• A. A patient approval for all services.
• B. Payer approval before certain services or medications; required by many insurers for elective or high-cost procedures.
• C. Approval by the receptionist.
• D. Automatic approval for all services.

Answer: (B)

Preauthorization, or prior authorization, is the insurance payer’s approval before a service or medication is provided. It’s commonly required for elective or high-cost procedures to confirm medical necessity and ensure the service will be covered under the policy. Typically, a clinician submits relevant medical information and a treatment plan, and the insurer reviews it to decide whether coverage will be granted. If approved, the service is usually covered; if not, the patient may face higher out-of-pocket costs or need an alternative plan or an appeal. It’s not approval by the patient or the receptionist, nor is it automatic for all services.

Preauthorization, or prior authorization, is the insurance payer’s approval before a service or medication is provided. It’s commonly required for elective or high-cost procedures to confirm medical necessity and ensure the service will be covered under the policy. Typically, a clinician submits relevant medical information and a treatment plan, and the insurer reviews it to decide whether coverage will be granted. If approved, the service is usually covered; if not, the patient may face higher out-of-pocket costs or need an alternative plan or an appeal. It’s not approval by the patient or the receptionist, nor is it automatic for all services.