Understanding Health Insurance Prior Authorization Requests

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From renewing your coverage each year to making regular doctor’s appointments, health insurance plays a big role in your care — and it can also get pretty complex. One of these complexities you’re likely to encounter at one time or another is that your insurer may not pay for specific procedures immediately – your doctor may need to obtain something called a prior authorization first.

This article will help you learn more about prior authorizations, including what they are, what they’re for, how they work, the differences between medical and prescription authorizations, and several common treatments that require prior authorization. If your healthcare provider has told you they need a prior authorization before you can have a procedure or medication, here’s what you need to know.

What Are Health Insurance Prior Authorizations?

When you’re searching for an affordable health insurance plan, one thing to consider is whether the plan requires prior authorizations. And before that, it helps to develop a basic understanding of what prior authorizations are. 

When you need a prior authorization, it means you (or your care provider) need to get permission from your health insurance company to get treatment from a healthcare provider who isn’t your primary care doctor (PCP). A referral is an order from your PCP to see a specialist or have another healthcare provider perform certain procedures. Your PCP helps decide whether the services of a specialist are necessary for you. A prior authorization is essentially a request to your health insurance provider to see whether or not it’ll cover the specialist care your doctor recommends.

Before you get certain medical procedures or fill prescriptions, you need to get confirmation that your insurance will cover the costs. Health plan administrators examine medical records from your doctors to see if the service or drug is medically necessary. If your plan administrator deems the procedure or medication necessary, your insurance plan can cover the costs. If not, you may need to pay out of pocket. Your plan might not pay any portion of the cost for a specialist’s services unless you receive a prior authorization first.

Getting this type of precertification or preapproval is a way for health plans to keep costs down. Your insurance company’s goal in using prior authorizations is to ensure you receive the appropriate treatment from your healthcare provider while avoiding unnecessary costs like name-brand prescriptions when a generic option costs less and works just as well.

How Prior Authorizations Work

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If your doctor is part of your healthcare provider network, they can start the prior authorization process for you, and there probably won’t be much you have to do. However, if you’re seeing an out-of-network doctor and need a prior authorization treatment, you’ll have to obtain that prior authorization yourself. The insurance company may not pay for your treatment if you don’t complete this step. 

The best practice is to call your insurance company and determine what treatments require prior authorization before visiting the doctor. Give your insurance company your health plan ID number so they can discuss the specifics of your plan. Armed with this information, you can more actively decide what treatment options will work best for you.

Once the insurance provider receives your prior authorization request, you can expect it to be processed within about a week. After that, the provider will either approve or deny your request. Sometimes, they may ask for additional information before making a determination.

In an emergency, go to the hospital nearest you for care — your insurance plan can’t make you wait to receive emergency care. Depending on your plan, you may have to pay for some emergency services, however. If you haven’t reached your deductible, you might owe a co-pay or part of the charges.

If you need non-emergency care, check your health plan’s website or documentation for details. Or, contact customer service to see if you need a referral or prior authorization. 

The No Surprises Act of 2020 protects consumers from unexpected out-of-network bills. These unexpected bills must be covered without prior authorization. In an emergency situation, people often have little or no control over where they receive care. Also, in non-emergency cases, out-of-network health providers, such as anesthesiologists, may treat patients in non-emergency situations. You, as the patient, may not even realize you’re receiving care from an out-of-network provider. In these cases, you won’t need prior authorizations.

What’s the Difference Between Medical and Prescription Authorizations?

Prior authorizations for medical treatments and prescriptions are similar, except that a prior authorization for treatment usually comes from a doctor’s office, and a prior authorization for a prescription likely will come from your pharmacy.

Suppose you have a scheduled medical procedure that requires prior authorization, and you may or may not need to stay in the hospital afterwards. In that case, you’ll need to request prior authorization well in advance of your procedure date. That’s because prior authorizations can be complicated at times and require a fair amount of time to complete. 

For prescription prior authorizations, the process begins with your doctor ordering a medication prescription for you. When your pharmacy receives this, the pharmacist is informed of the medication’s prior authorization status. Next, they’ll notify your doctor. Someone at your doctor’s office will complete your prescription prior authorization paperwork and return it to your insurance company. From there, your insurance company will approve or reject the request.

What Common Treatments Require Prior Authorization?

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Some types of treatment are much more likely to require you to get prior authorizations. These include:

  • Procedures that are considered cosmetic
  • Medications or procedures that are only meant to treat specific health conditions
  • Medicines that have low-cost alternatives (generic versions) that are just as effective as the originals
  • Prescription drugs that are often misused
  • Medicines that can present health risks when combined with other drugs

If you’re changing your insurance to a new policy, it’s important to find out what the new policy will and won’t pay for before you start the plan. Because each insurance company has its own rules, the requirements for getting pre-authorization for a specific procedure or drug can also be different. If you’re currently using medications that require prior authorization, it’s essential to understand if the new insurance company requires the same process for obtaining prescriptions.

Remember that, before any scheduled medical treatments, it’s important to check with your healthcare provider and insurance company to find out if you need a prior authorization. In addition, you should check on prior authorization requirements well in advance of your scheduled treatment date to ensure there’s enough time for all the required paperwork to go through.