When are prior authorizations necessary?

Health insurance can be confusing. Deciphering a billing statement, figuring out deductibles, or receiving a prior authorization to pay for certain procedures can all be mind-boggling. However, we are here to help! In this blog we are going to focus on prior authorizations, including what they are and why insurance companies require them.

Understanding prior authorizations
You may need to get permission from your health insurance company before you get treatment from a health care provider who isn’t your primary care doctor (PCP). A referral is an order from your PCP to see a specialist or get certain medical procedures performed by another health insurance provider. Your PCP helps you decide whether the services of a specialist are necessary for you.

Before you get medical procedures or fill prescriptions, you need to get permission from your health plan first. Health plan administrators examine medical records from your doctors to see if the service or drug is medically necessary.

Your plan may only pay a portion of a specialist’s services cost unless you receive prior authorization first.

Prior authorizations from the insurance company’s viewpoint
By requiring precertification or preapproval, health insurance providers can control expenses. A health plan must first approve a service before a doctor or other medical professionals can give it to a patient.
Insurance companies use prior authorizations to ensure their policyholders get the care they need from their doctors without spending more money than required, such as on expensive brand-name medicines when a generic option is just as effective.

How to obtain a prior authorization
If your doctor is a part of your insurance company’s preferred network of healthcare providers, he can initiate the pre-authorization process on your behalf. You will be responsible for securing your prior authorization for specialized care that an out-of-network doctor provides. You must obtain prior authorization to cover the full cost of treatment.

If in doubt about the insurance provider’s prior authorization policy, the best practice is to call ahead before a procedure and find out if prior authorization is required. Make sure to have your plan ID on hand for the insurer.

It usually takes the insurance company 5-10 days to process the prior authorization request after it has been submitted. The provider will then either grant the request or ask for more information.

Common procedures requiring prior approval
Some examples of treatments that typically require pre-approvals are as follows:

• Cosmetic procedures
• Risky drugs or surgical procedures
• Medicines for which a generic version is available at a lower cost
• Drugs that, when combined with others, can be harmful

Before enrolling in a new insurance plan, it’s vital that you learn exactly which costs will be covered and which will not. Pre-authorization for a surgery or prescription may be necessary, but this is only sometimes the case depending on the insurance provider.

What about emergencies?
If you’re experiencing a medical emergency, please visit the nearest hospital. Emergency room visits can’t be delayed due to insurance issues. Some emergency services may require payment, such as a co-pay you are responsible for if you still need to meet your deductible.

In the event that your medical condition is not life-threatening, you should check with your health insurance provider to determine if you need a referral or prior authorization. The No Surprises Act of 2020 was designed to shield patients from high out-of-network medical costs when receiving emergency care. These costs must be paid immediately and do not require prior approval.

It’s always best to be prepared
You should always double-check with your doctor and insurance company to see if they require a pre-authorization before you undergo any planned medical procedures. Also, ensure you have plenty of time to submit all the necessary documentation by researching prior authorization requirements well before your intended treatment date.