What does the term "prior authorization" mean?

The term "prior authorization" refers specifically to the process of obtaining approval from an insurer before a healthcare service is delivered. This requirement is typically established by insurance companies to ensure that the proposed treatment meets certain criteria for medical necessity and is covered under the patient's plan.

This process serves multiple purposes, such as managing healthcare costs, ensuring that patients receive appropriate care, and preventing services that may not be deemed necessary. By securing prior authorization, healthcare providers can avoid issues with reimbursement once the service is performed, thus ensuring that patients receive the coverage they expect.

In contrast, other choices reflect different concepts. For instance, approval obtained after a service is delivered pertains to post-service validation rather than prior authorization, while a requirement for patients to pay a fee refers to cost-sharing structures and not to the authorization process itself. Lastly, a notification for scheduling procedures does not pertain to the authorization for coverage decisions but rather to the logistics of patient care. Understanding the specifics of "prior authorization" is essential for navigating insurance processes effectively.