Prior authorization
Prior authorization is a payer’s requirement that a provider obtain approval before delivering certain services — without it, the payer may not cover the care.
Updated
Prior authorization (also called pre-authorization or precertification) is a payer’s advance approval that a specific service, medication, or procedure is covered before it is provided. For services that require it, delivering the care without the approval risks a denial.
Which services require prior authorization varies by payer and plan and changes frequently.
In practice
A service that needed prior authorization but was delivered without it is denied on that basis alone, so tracking each payer’s authorization requirements is a front-end discipline that prevents avoidable back-end losses.
How much an approval is worth afterwards depends on the plan, and for Medicare Advantage the answer changed. Where a coordinated care plan has approved an item or service through prior authorization, it “may not deny coverage later on the basis of lack of medical necessity” and may not reopen the decision except for good cause or reliable evidence of fraud or similar fault. A retroactive medical-necessity denial against a valid MA authorization is therefore contestable on the regulation, not only on the merits.
Commonly confused with
- Referral: A referral is one provider directing a patient to another (often a primary-care physician to a specialist); prior authorization is a payer’s approval of a service.
- Predetermination: A predetermination is a non-binding estimate of coverage; prior authorization is a required (mandatory) approval to obtain. What an obtained authorization guarantees varies by plan — it does not dispose of eligibility, filing deadlines or coding, and for Medicare Advantage coordinated care plans it does bar a later denial for lack of medical necessity.