What is prior authorization?

Prior authorization is when the provider requests a pre-service review to determine coverage and obtain approval from an insurance carrier to pay for a proposed treatment or service. This approval is based on medical necessity, medical appropriateness, and benefit limits at the review time. If the insurance requires prior authorization, you must obtain it before service as the performing or ordering physician. Remember: insurance prior authorization is still not guaranteed payment for a planned procedure. It is just a pre-service review. Prior authorizations are usually only needed for more costly procedures where alternative treatment requirements would have been tried and failed before moving to a more invasive procedure.

What does it mean when insurance responds with no authorization required?

This means the plan does not require prior authorization or premedical review. In these cases, it is going to be up to the physician or physician practice to decide if the patient meets the payor guidelines per local coverage determination policies. The provider will need to confirm the frequency of the procedure is allowed and ensure all other alternative treatments have been tried and failed before moving forward. No authorization, just as prior authorization, is not a guarantee for payment, and a prior authorization gives the physician more power to appeal denied claims.

Can you do anything when a high dollar procedure does not require authorization?

Yes. You should always ask if there is a predetermination choice. The insurance may provide a predetermination in some cases. A predetermination will review the entire medical record and decide if the coverage is met based on the local coverage determination policy. They can even, if requested, give you the dollar amount they will predict paying once the claim is filed.

This predetermination is recommended anytime you have a procedure of higher value to ensure a more likely chance the physician will get paid, and the patient will not end up with a hefty bill balance. Again, this is not a guarantee for payment, but it does provide more power when appealing a denied claim.

The bottom line is, as a prior authorization specialist and as a patient, the “no authorization required” words are not what you want to hear because there is a higher chance of post-medical review if local coverage determination requirements on the date performed are not met. The claim can be denied, or at a later date, the insurance can ask for recoupment payment.