All You Need to Know About Pre-Authorization and How to Go About It


Medical jargon is often always complicated to get around and understand for most people not closely associated with the field. It is not easy to immediately understand what something is after immediately hearing it and therefore, this guide will help you understand one such term that is ‘Pre-authorization’ or known as ‘prior authorization’. Of course, it is rather important to know terms such as these beforehand (or rather any medical term if you are associated with it somehow!). This can be particularly important before visits, surgeries or other major procedures and obviously, when the bills roll in. 


Preauthorization or prior authorization refers to a method of determining whether or not a procedure, medication or service will be covered by some health insurance companies, particularly in the United States of America. This does not usually apply for emergencies. It is also sometimes seen as a decision of sorts that determines whether a service, prescription drug, medical equipment or treatment plan is medically necessary. 

It is important to also realise that this authorization is not an assurance that the insurance company or the health plan will cover the costs of the treatment, equipment, drugs or any of what was mentioned before. 

How does it work?

The authorization works in a process. First of all, the request for a prior authorization is provided. This is usually given by a qualified healthcare provider. From here, the process varies from each company to the other. However, the usual and general process is the completion of the preauthorization medical form. Then this is faxed. This is where the form may be rejected or approved. In some cases, there will be a request for further information. By chance the form is rejection, the healthcare provider is given the right to file for an appeal. This will be based on the process of medical review by the provider. The approval of the request may take up until 30 days by some companies so one has to be patient sometimes.

Why is there a need for a prior authorization?

There is always the question of what is the exact use of this service, regardless of the service. A preauthorization usually is to give savings in costs for consumers. This is achieved by preventing any unnecessary or unwanted treatments or procedures. Another way this may be achieved, for example, is when a more generic drug is available but a more expensive one is prescribed, the generic one is provided. In many medical services, preauthorization is are a mandatory requirement such as in Georgia where around an average of 800 medical services require prior authorization. An estimated $23-$31 billion is costed for the Unites States’ Healthcare system by practises of prior authorization.

There have been a number of legislative improvements made to this practise. It is likewise for technological advances as well. With this information, your medical and financial glossary has been upped for your next visit!  

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