Paul Sanchez
Prior authorization, also known as precertification, is a requirement by health plans for patients to obtain approval for a health care service or medication before the care is provided. This process is used by most health insurers, including public programs like Medicaid and Medicare, to ensure that the service or medication is medically necessary and cost-effective. While the process for obtaining prior authorization varies by insurer, it generally involves the submission of administrative and clinical information by the treating physician, and sometimes the patient. In some cases, patients may be financially responsible for more, or all, of the provided services if prior authorization is not obtained.
Do all health insurers require precertification for all medical procedures?
| Characteristics | Values |
|---|---|
| What is pre-certification? | Pre-certification, also known as prior authorization or pre-approval, is when a health insurance provider requires approval for a medical procedure or service before it is carried out. |
| Who requires pre-certification? | The patient or their healthcare provider must obtain approval from the insurer. |
| When is pre-certification required? | Pre-certification is required before the care is provided. The process can take up to six weeks. Federal rules dictate that non-urgent care must be decided within 15 days and urgent procedures within 72 hours. |
| Why is pre-certification necessary? | Pre-certification is a cost-control method used by insurers to ensure that the treatment is medically necessary and cost-effective. It also ensures that the service is not being duplicated. |
| Which treatments require pre-certification? | Pre-certification is usually required for complex or expensive treatments, such as surgery, MRIs, CT scans, PET scans, and hospital visits. It is also often required for prescription medications. |
| What happens without pre-certification? | Without pre-certification, the insurer may deny the claim or reduce the payment, leaving the patient financially responsible for the service. |
| How to obtain pre-certification? | Contact your insurance provider to determine the requirements for pre-certification. The healthcare provider will usually handle the process. |
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What You'll Learn
Pre-approval, prior authorization, preauthorization, or precertification
Prior authorization, also known as pre-authorization, pre-approval, or precertification, is a cost-control process by which health insurance plans require patients to obtain approval for a healthcare service or medication before it is provided. This process allows insurers to review proposed care ahead of time, confirm that coverage for the service is available under the plan, and give the medical provider approval to proceed with the treatment or prescription.
The use of prior authorization is controversial. On the one hand, it helps to keep medical costs down and promotes safe, efficient, and evidence-based care. On the other hand, it can be burdensome for medical providers and patients, often resulting in delayed care or patients abandoning care altogether. The process of obtaining prior authorization can be unpredictable and time-consuming, with inappropriate rejections and slow appeal processes.
Prior authorization is typically required for more expensive services, such as surgery and specialty drugs, while an office visit would not usually require it. The specific requirements vary by insurer, with each insurer setting its own rules. Patients are responsible for knowing the pre-certification requirements of their health plans and should contact their insurance company to determine benefits and coverage.
In the United States, the Affordable Care Act prohibits non-grandfathered health plans from requiring prior authorization to see an in-network OB/GYN or to receive emergency services. Additionally, some states have adopted or are considering "gold card" laws that would require health plans to waive prior authorization for services ordered by providers with a track record of prior authorization approval.
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Medical necessity
Health insurance plans will only provide coverage for services they deem to be medically necessary. This means that a treatment, test, or procedure is necessary to maintain or restore your health or to treat a diagnosed medical problem. To be considered medically necessary, a service must be:
- For the purpose of evaluating, diagnosing, or treating an illness, injury, disease, or its symptoms.
- In accordance with the generally accepted standards of medical practice.
- Clinically appropriate in terms of type, frequency, extent, site, and duration, and considered effective for the patient's illness, injury, or disease.
- Not primarily for the convenience of the patient, healthcare provider, or other physicians or healthcare providers.
- Not more costly than an alternative service or sequence of services that are at least as likely to produce equivalent therapeutic or diagnostic results.
Prior authorization, also known as pre-certification, is a way for insurance companies to determine whether a procedure meets the criteria for medical necessity. It is also a way to ensure that a specific medical service is provided cost-effectively. Prior authorization is usually required for complex treatments or prescriptions. Some services that commonly require prior authorization include diagnostic imaging (such as MRIs, CT scans, and PET scans), invasive procedures, and hospital services.
It is important to note that the requirements for prior authorization and medical necessity may vary depending on the type of health insurance plan, the state where the plan is regulated, and the patient's individual circumstances. For example, Medicare Advantage plans set their own prior authorization and medical necessity guidelines, while private insurers that offer non-Medicare plans can set their own criteria. Therefore, it is recommended that patients contact their insurance carrier directly to determine the specific requirements of their plan.
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Cost-effectiveness
Prior authorization, also known as pre-authorization, pre-approval, precertification, predetermination, and pre-certification, is a requirement by health plans for patients to obtain approval for a health care service or medication before the care is provided. This allows the plan to evaluate whether the care is medically necessary and covered under the terms of the patient's policy. While pre-approval does not guarantee that the insurer will pay for the service, it is still an important part of cost control and is used by most health insurers, including public programs like Medicaid and Medicare.
The process for obtaining prior authorization varies by insurer but involves the submission of administrative and clinical information by the treating physician, and sometimes the patient. This may include photos and medical necessity information. The more expensive the service, the more likely it is that the insurer will require pre-approval. For example, surgery, MRIs, or hospital visits are more likely to need pre-approval than a simple office visit.
Insurers use prior authorization to make sure that a specific medical service is necessary and being provided cost-effectively. This helps to keep healthcare costs in check and prevent overspending on unnecessary medical care. For example, if a patient has lung cancer and is seeing multiple specialists, their insurer may not pre-authorize a second CT scan until it has confirmed that the patient's lung health provider has reviewed the first scan and still believes a second one is necessary. Insurers may also recommend a less costly but equally effective alternative to the requested treatment or medication.
The use of health plans' own "home-grown" clinical criteria to make coverage decisions has come under scrutiny, with some states implementing regulations to ensure that health plans address pre-approval requests in a timely manner. For example, California now prohibits plans from using their own clinical criteria for medical necessity decisions, requiring commercial insurers to use criteria consistent with generally accepted standards of care.
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Step therapy
Many health plans require pre-certification (also known as prior authorization) and sometimes predetermination of medical necessity before providing care. Patients are responsible for knowing the pre-certification requirements of their health plans. Prior authorization is a requirement that a healthcare provider (such as your primary care physician or a hospital) gets approval from your insurance plan before prescribing medication or performing a medical procedure. Without prior approval, your health insurance plan may not pay for your treatment, leaving you responsible for the full bill.
Insurers use prior authorization to determine whether the criteria for medical necessity are being met. They look at factors like whether the treatment is recommended for your situation according to up-to-date, research-backed evidence. They also check to make sure that the service is not being duplicated.
If your medication requires step therapy, your pharmacist will receive a message from the insurance company once they submit a claim for it. They will then work with your healthcare provider to find the right solution for you. If none of the medications in step one are a good choice, your healthcare provider may be able to help. You can also ask your healthcare provider to contact your insurance company or prescribe another medication.
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State-specific rules
In the United States, prior authorization (also called "preauthorization" and "precertification") is a requirement by health plans for patients to obtain approval for a health care service or medication before the care is provided. While this is a common practice, the specific rules and requirements vary by state and insurer. Here is an overview of some state-specific rules:
California
California prohibits health plans from using their own clinical criteria for medical necessity decisions. Commercial insurers must use criteria consistent with generally accepted standards of care and developed by a nonprofit association for the relevant clinical specialty. This state law does not apply to self-insured employer-sponsored plans.
New York
In New York, the requirement for pre-authorization for treatment depends on the insurance policy or contract. If the health care provider is a participating provider for the insurer, the contract between them might contain relevant provisions. New York Public Health Law § 4406-b(1) requires coordination between the obstetrician and the PCP. Patients covered under an HMO plan may need to receive care from a participating health care provider as per the contract.
Florida
In Florida, prior authorization is required for certain services, procedures, or medications to be covered by the health plan. This includes oncology drugs, medical injectables, and radiological services. Prior authorization is not required in emergency care situations. Florida Blue, for example, requires members to consult with their medical and pharmacy teams before receiving certain services to ensure coverage.
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Frequently asked questions
Pre-certification, also known as prior authorization or pre-approval, is when your health insurance company agrees that a medical service or medication is necessary and covered under the terms of your policy.
Insurers require pre-certification to ensure that the service or medication is necessary and to keep healthcare costs in check. It is also a way of rationing healthcare.
If you don't obtain pre-certification, your treatment or medication might not be covered, and you may be responsible for paying more out of pocket.
Services that commonly require pre-certification include diagnostic imaging (MRI, CT, and PET scans), surgery, hospital visits, and prescription medications.
You can contact your insurance carrier directly to ask about the status of any pre-certification requirements. It is recommended to begin the pre-certification process early to avoid delays in receiving care.
