What Is Prior Authorization?
Prior Authorization — also called Prior authorization
Prior authorization is a requirement that your health insurance company approve certain medications, medical procedures, treatments, or services before it will pay for them. Also called preauthorization, prior approval, or precertification, prior authorization helps insurers determine whether a service is medically necessary and covered under your health plan. Receiving prior authorization does not guarantee payment, and not every healthcare service requires prior authorization.
Official source: cms.gov
What is prior authorization?
Prior authorization is a utilization management process used by many health insurance plans.
Before certain healthcare services are provided, your doctor or healthcare provider may need to submit information to your insurance company explaining:
- Why the treatment is needed.
- Why it is medically appropriate.
- Why alternative treatments may not be suitable.
The insurance company reviews the request and determines whether the service meets the plan's coverage requirements.
If approval is required, it is generally obtained before the service is performed.
Why do insurance companies require prior authorization?
Insurance companies use prior authorization to help ensure that healthcare services are:
- Medically necessary.
- Covered under the health plan.
- Consistent with clinical guidelines.
- Appropriate for the patient's condition.
Prior authorization may also help prevent duplicate services, unnecessary procedures, or the use of medications when equally effective lower-cost alternatives are available.
Coverage policies vary by insurer and health plan.
What services may require prior authorization?
Requirements differ among health plans, but prior authorization commonly applies to:
- Advanced imaging, such as MRI or CT scans.
- Certain surgeries and procedures.
- Specialty medications.
- High-cost prescription drugs.
- Durable medical equipment (DME).
- Physical therapy after a certain number of visits.
- Home healthcare services.
- Some behavioral health treatments.
Routine office visits and preventive care generally do not require prior authorization, although plan rules vary.
How does the prior authorization process work?
The process typically follows these steps:
- Your healthcare provider recommends a treatment or service.
- The provider submits a prior authorization request to your insurance company.
- The insurer reviews medical records and other supporting documentation.
- The insurer approves, denies, or requests additional information.
- Your provider informs you of the decision.
If coverage is denied, you generally have the right to appeal the decision.
Does prior authorization mean my treatment was denied?
No.
A prior authorization requirement simply means your insurance company wants to review the request before deciding whether the service qualifies for coverage.
Many requests are approved after the insurer reviews the available medical information.
If a request is denied, your healthcare provider may submit additional documentation or you may have appeal rights under your health plan.
Does Medicare require prior authorization?
Sometimes.
Original Medicare generally does not require prior authorization for most medically necessary services, although there are important exceptions for certain items and services.
Many Medicare Advantage plans require prior authorization for a broader range of healthcare services because they are administered by private insurance companies.
The specific requirements depend on your plan.
Does Medicaid require prior authorization?
Often, yes.
Many state Medicaid programs require prior authorization for certain:
- Prescription drugs.
- Medical equipment.
- Specialty care.
- Behavioral health services.
- Non-emergency transportation.
- Other covered services.
Because Medicaid is jointly administered by federal and state governments, prior authorization requirements vary by state.
Prior authorization vs. referral
These terms are often confused.
Prior authorization
Permission from your insurance company before certain services are covered.
Referral
A recommendation from your primary care provider to receive care from a specialist.
Some health plans require one, both, or neither.
Prior authorization vs. medical necessity
These concepts are closely related.
Medical necessity refers to whether a healthcare service meets the insurer's clinical coverage criteria.
Prior authorization is the review process insurers use before certain services are provided.
A service that requires prior authorization is often reviewed to determine whether it meets the plan's medical necessity requirements.
Common misconceptions
Myth: Once my insurance approves prior authorization, my treatment is guaranteed to be paid for.
Reality: Prior authorization confirms that the service meets the plan's coverage requirements at the time of review. Payment still depends on your eligibility, plan benefits, provider participation, claim submission, and other terms of your health plan.
Why this matters
Prior authorization can affect when you receive healthcare and whether your insurance covers certain treatments. Understanding the process can help you work with your healthcare provider, respond quickly if additional information is needed, and understand your appeal rights if coverage is denied.
In real life
- A physician recommends an MRI for persistent back pain. Before the scan is scheduled, the insurance company reviews the request through its prior authorization process.
- A patient with rheumatoid arthritis is prescribed a specialty medication that requires prior authorization before the pharmacy can dispense it under the health plan.
- A Medicare Advantage enrollee learns that knee replacement surgery requires prior authorization under the terms of the plan.
Also known as
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Frequently asked questions about Prior Authorization
What is prior authorization?+
Prior authorization is a review process in which your health insurance company approves certain medications, treatments, or services before agreeing to cover them.
Is prior authorization the same as a referral?+
No. A referral is a recommendation from your healthcare provider to see a specialist. Prior authorization is approval from your insurance company for coverage of certain services.
Does prior authorization guarantee payment?+
No. Approval does not guarantee payment. Coverage also depends on your health plan, eligibility, provider participation, and successful claim processing.
Who submits a prior authorization request?+
In most cases, your healthcare provider submits the request and provides the medical information needed for the insurance company to review it.
Can I appeal a prior authorization denial?+
Yes. Most health plans provide an appeals process if a prior authorization request is denied. Your provider may also submit additional medical documentation for reconsideration.
Does Original Medicare require prior authorization?+
Generally, Original Medicare does not require prior authorization for most medically necessary services, although there are exceptions. Medicare Advantage plans more commonly require prior authorization for certain services.
Sources
- CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F)
Centers for Medicare & Medicaid Services — cms.gov - Medicare Advantage Plans
Medicare.gov — medicare.gov - Health Insurance Protections
U.S. Department of Health and Human Services — hhs.gov - Interoperability
Centers for Medicare & Medicaid Services — cms.gov