Prior Authorization

Example

“Janet's doctor had to submit prior authorization paperwork to her insurance company before scheduling her MRI, which delayed her scan by two weeks.”

Memory Tip

Think 'Prior Authorization' as 'Permission Required' - you need insurance permission before getting certain treatments.

Why It Matters

Prior authorization can significantly impact healthcare access and timing, potentially delaying necessary treatments while controlling insurance costs. Understanding which services require prior authorization helps patients and providers plan appropriately and avoid unexpected claim denials or out-of-pocket expenses.

Common Misconception

Many people believe prior authorization is just a paperwork formality that's automatically approved, but insurers frequently deny authorization requests based on medical necessity criteria or preferred treatment protocols. Additionally, emergency services typically bypass prior authorization requirements, but follow-up care may still require approval.

In Practice

Mike needs a $3,000 specialized cardiac test. His insurance requires prior authorization, and his doctor submits medical records showing previous treatments failed. The review takes 5 business days, and approval comes with a requirement to use a specific facility. Without prior authorization, Mike would pay the full $3,000, but with approval, his copay is only $150.

Etymology

Emerged in the 1980s as managed care expanded, combining 'prior' meaning beforehand with 'authorization' from Latin 'auctor' meaning originator, reflecting the insurer's role in approving medical decisions in advance.

Common Misspellings

Related Terms

More in insurance

Other insurance terms you should know

See Also