Prior Authorization

Prior authorization is the process through which an insurer reviews and approves certain medical treatments, procedures, or prescription drugs before they are performed or dispensed. It ensures that the recommended care is medically necessary, appropriate, and covered under the policy before expenses are incurred. Prior authorization helps manage costs and ensures the use of safe, evidence-based treatments that align with clinical guidelines.

This requirement is common for high-cost medications, surgeries, specialized medical equipment, and certain diagnostic tests. The healthcare provider usually submits the request directly to the insurer, including medical documentation and a treatment rationale. Once approved, the authorization confirms that the service will be covered according to the plan’s terms, provided all other eligibility criteria are met.

Example:

If your doctor prescribes an expensive biologic medication for a chronic condition, your insurer may require prior authorization before you can fill the prescription. The doctor submits the request along with supporting medical records, and coverage begins once the insurer approves it.

What to Watch For:

Do not schedule procedures or fill prescriptions that require prior authorization until approval is received, as claims may be denied. Check your plan booklet or speak with your provider to confirm which services need authorization. Keep a record of approval letters or confirmation numbers, as insurers may require proof for reimbursement.