Prior Authorization- Is it really necessary?
As we’ve written about in other blog articles, there are dozens of healthcare terms you should be aware of. Prior Authorization is one that can hit your wallet in a big way, so this is one of the terms you should understand.
What does prior authorization mean?
Prior authorization simply means that your health insurance company requires advanced—or prior—approval for a medical treatment or prescription. Prior authorization may also be referred to as pre-auth, pre-cert or pre-certification.
Visit any doctor’s office and mention the term prior authorization and you are bound to get a look that you may not have anticipated. In all fairness, medical providers work hard to keep you healthy and it is expensive to maintain staff and overhead, so efficiency is crucial. Most of the time insurance companies are perceived as a roadblock to getting patients the care that they need. As with all issues, there are important facts on both sides of this issue.
Why do you need to get prior authorization?
Having spent the last 25 years working in a large multi-specialty clinic I had to hire additional staff to meet the insurance prior authorization needs. It was frustrating and expensive, but I could see why it was necessary. Most medical providers strive to give their patients quality care, delivered efficiently and timely, but they do not always complete some preliminary steps before they order big ticket items. This is where the insurance company steps in to protect your hard-earned contributions to your health care.
UPREHS has a duty to safeguard yours and your employer’s monthly payments for your health care. Without rules in place, those same medical providers might spend your money in an inefficient way. Eventually, your out-of-pocket health care expenses would increase. In order to maintain costs, increase quality and value, UPREHS helps your medical provider or hospital by reminding them of nationwide medical standards that apply before ordering expensive medical treatments.
Here are a few of the reasons why insurance companies require prior authorization
- Is a treatment medically necessary?
- Does the treatment put undue risks on the patient?
- Does a drug have a dangerous side effect, or is it abused often?
- Is there a less expensive—but equally effective—treatment available?
- Is there a generic drug instead of a brand name drug?
What requires prior authorization and who should request it?
Any hospital, rehab or nursing home admission requires prior authorization for a continued stay. Most hospitals know they won’t be paid unless they get the prior authorization, but it never hurts to call and verify. Many radiological exams and outpatient procedures also require prior authorization, in addition to some medications.
Your provider or the facility should submit the prior authorization on your behalf but it’s important to verify that, so you don’t end up with a bill for treatments or medication you hadn’t planned on.
For a complete list of procedures that require prior authorizations, you can click here.
What happens if you don’t’ get a Prior Authorization?
There are serious implications for not having a prior authorization. Your medical provider or hospital may get paid at a lower rate or may not get paid at all. They may turn around and bill you for any outstanding amounts. If you agree to a procedure that has not been approved, you will be responsible for full payment.
It is also important to understand that while a provider or facility may request prior authorization, it is not always approved. If you move forward with the treatment after an authorization has been denied, you are responsible for the related costs.
If you have questions, call us
Let us help you. Please call Member Services if you have any questions about this process.