What is Insurance Prior Authorization?

Heard the words prior authorization and not sure what they mean? Continue reading for an easy to understand explanation.

If you and your doctor have decided that surgery is an appropriate treatment for you, don’t be surprised if you hear the phrase, prior authorization, pre-certification, or pre-approval. These are all synonymous for the request of your insurance provider to give approval, prior to proceeding with the procedure. Here are a few things to know about what a prior authorization is and what it means to you.

When your insurance provider says they need to give a prior authorization to a procedure, it simply means that they want to review the information beforehand to determine coverage eligibility. Your doctor will submit your medical history, along with the billing codes for the procedure, to the insurance company.  

When determining prior authorization, the insurance company will look at a few things. They will look to see whether your specific plan covers the procedure, hospital, and doctor. They will also evaluate whether the procedure is medically necessary. This evaluation includes a review of your medical history including what alternative treatments you’ve already tried.

A couple examples of medically necessary criteria might be that you’ve previously tried anti-inflammatory medications, activity modification, and supervised physical therapy1 that did not relieve your symptoms. These can vary from health plan to health plan so the best way to understand what applies to you would be to talk to your doctor or check your insurance plan’s website.

Here are a few quick links to various insurance providers’ medical policy guidelines:*

*Zimmer Biomet, does not provide or recommend any particular health insurance, is not affiliated with the insurance companies below and cannot verify the accuracy of content on the websites at these links. All questions regarding coverage or your specific procedure must be directed to your health insurance company.

Please know, however, that prior authorization does not guarantee payment. Unexpected things can happen during surgery than can affect how the procedure is coded. For example, say your estimate was based on a standard hip replacement and the surgeon runs into complications. That would result in a different code being billed. This could cause the final cost not to match the initial estimate.

Prior authorization is also important because without it, the insurance company might be able to deny coverage for the procedure. When you call your insurance provider, be sure to write down the name of the person you talk to and to ask for a reference number. This will be vital should you need to appeal denial of coverage down the road. You can ask for written confirmation of your insurance company's authorization and what amounts they will cover.

For example, if you’re told by your insurance company that you don’t need a prior authorization before surgery and afterward the claim is denied because you didn’t receive prior authorization, you might be able to get the denial overturned. Simply provide the person’s name and the reference number for when you were told that prior authorization wasn’t necessary and ask that the insurance plan review your earlier call to determine whether you were provided with misinformation.

Preparing to handle the costs of a medical procedure and dealing with insurance can be daunting. Your surgeon’s office and your insurance plan’s customer service team are great places to get you started.

References
  1.  Aetna Insurance Website Clinical Policy Bulletin Notes August 13, 2019. http://www.aetna.com/cpb/medical/data/200_299/0287.html
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