What Is Prior Authorization in Health Insurance?
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For certain medical treatments and medication, your insurance company may require you to obtain prior authorization before agreeing to cover the costs. Insurance companies use prior authorization to ensure a certain service is medically necessary and therefore, a covered benefit for the policyholder.
Learn about your other options if you can't get prior authorization from your health insurance company.
How Does Prior Authorization Work?
Getting prior authorization so the patient can receive a certain treatment or prescription as a covered benefit typically involves the healthcare provider submitting a request to the insurance company. This request usually includes relevant medical records and an explanation of why the service or medication is medically necessary.
For example, a pre-authorization request may discuss the patient’s history and failed alternative therapies, a lack of specialists within the network or clinical evidence supporting the efficacy and safety of a desired treatment.
What Is a Prior Authorization for Medical Treatment?
Medical prior authorization focuses on approving or denying requests for medical procedures, tests, surgeries or specialist consultations.
What Is a Prior Authorization for Medication and Prescriptions?
Prescription drug prior authorization is required for specific medications that may have cheaper alternatives and are deemed too costly by the insurance provider. After authorization is issued, you can pick up your prescription at the pharmacy.
What Is a Prior Authorization for Service Locations?
Location prior authorization is required when the policyholder seeks coverage for medical services outside of their designated network because no provider within the network could provide the same service. This may be the case if you have a rare illness requiring special care you can’t access through an in-network provider. By getting location prior authorization, you may still be able to pay your lower in-network rate.
In cases where prior authorizations are not granted for medications, alternative options can be explored. One such option is step therapy, where the health insurance company may require the patient to try alternative, typically lower-cost medications before approving the originally prescribed one. An example would be using Benadryl for your allergies and if it is ineffective, you can move on to tier 1 or higher medication. Your health insurance company must verify you went through the proper steps before escalating your care.
You can also seek formulary exceptions when a medication not included in the insurance company's formulary is deemed necessary by the healthcare provider. For example, a doctor may prescribe for their patient a specialized medication for her asthma that isn’t initially covered by their insurance company. To address this, the doctor requests a formulary exception, explaining to their insurance company why the drug is necessary and should be covered.
What Are the Benefits of Prior Authorization?
Prior authorization helps ensure that medical treatments and prescriptions are appropriate, safe and necessary for the patient's condition. By evaluating requests, insurance companies can prevent unnecessary or ineffective treatments, reducing healthcare costs in the long run. This process also helps safeguard patients by promoting evidence-based care and minimizing risks associated with certain procedures or medications.
Additionally, prior authorization helps insurance companies manage their formularies, negotiate better drug prices and maintain affordability for policyholders. It enables them to control costs and allocate resources more effectively while prioritizing patient safety and quality of care.
What Types of Treatments or Medications Require Prior Authorization?
While the specific treatments and medications that require prior authorization can vary between health insurance plans, certain categories typically fall under this requirement. Expensive specialty drugs, high-cost diagnostic tests, elective surgeries, some medical equipment and services from out-of-network providers are among the most common treatments and medications that require prior authorization.
How Do I Get a Pre or Prior Authorization?
To obtain prior authorization, you typically need to follow a few key steps:
- Consult your healthcare provider: Discuss the treatment or medication that requires prior authorization and explain why it is medically necessary for your condition. Your healthcare provider will guide you through the process and help you understand the documentation needed for the request.
- Obtain supporting documentation: Your healthcare provider will gather the necessary medical records, clinical notes, test results and any other supporting documents required by the insurance company. These documents provide the justification for the medical necessity of the requested service or medication.
- Submit the prior authorization request: Your healthcare provider's office will complete and submit the prior authorization request to your insurance company. The request should include the supporting documentation and a detailed explanation of the medical necessity.
- Respond to questions: In some cases, your insurance company will request additional information or documentation before approving or denying your request for prior authorization. Responding timely with the details they need can help ensure a speedy response.
- Follow up: Keep track of the status of your request and communicate with your healthcare provider's office or insurance company if any additional information is required. Stay proactive and advocate for your healthcare needs.
How Long Does It Take To Get Prior Authorization?
It can take five to 10 business days on average for an insurance company to grant pre-authorization. The duration can vary depending on several factors such as the complexity of the procedure or medication, the responsiveness of the healthcare provider's office and how efficiently your insurance company reviews such requests.
As a result, it is crucial to initiate the prior authorization process well before your planned treatment or prescription refill to allow for potential delays or appeals if needed. Open communication with your healthcare provider's office and regular follow-up calls can help expedite the process.
What Can I Do if My Prior Authorization Is Denied?
Consider filing an appeal with your insurance company if your prior authorization is denied. The appeal process often involves submitting a letter detailing why you believe the service or medication is medically necessary, accompanied by supporting documentation from your doctor. You will usually have 180 days after you’ve been denied to file your appeal.
If the appeal is unsuccessful, you may be able to escalate the case to your state's insurance commissioner or seek assistance from a patient advocate or lawyer.