Did you know…that "prior authorization" is one of the most important insurance terms to understand? It means your provider must receive permission from the insurance plan, prior to services being rendered, in order for certain benefits and services to be covered.
This requirement allows the insurance plan to deny coverage for a variety of reasons. It could be that you need to try the less expensive drugs before they will cover the more expensive ones. It could be that you need to have an ultrasound before they will cover an MRI. The insurance plan could take the stance that the proposed service is not medically necessary or appropriate.
If the insurance plan denies coverage, you have the right to appeal that decision by providing additional information. Your provider can speak directly to a provider employed by the insurance company to explain their rationale for your proposed treatment plan. A good percentage of the appeals get approved.
In some cases, the prior authorization is denied because the provider did not submit thorough or correct documentation. I’ve seen many requests that had the required information missing.
Here are a few recent examples we've been involved with:
The doctor left the past history off the request form for a drug that required the doctor to document that the patient had tried a variety of other drugs before the new and expensive drug would be covered. That was an easy fix.
An employee with a bad back had their doctor request an MRI that was denied. The insurance plan told the doctor that the patient needed to try physical therapy before they would cover the MRI. One could argue that it makes sense to try physical therapy first.
An employee with cancer had a PET scan denied because the insurance plan indicated that the person was already diagnosed as having cancer. Once the doctor provided the rationale for a PET scan, it was approved. Sometimes it just takes better communication.
An employee was admitted to an inpatient detox center after he thought he was told that his insurance plan had approved the stay. After five days of being there, the approval was still pending. The plan approved the stay on the 6th day, but that could have been disastrous. You should always confirm that any procedure you undergo that requires prior authorization has in fact been approved.
In general, prior authorization is required for inpatient hospital services, inpatient services at other health care facilities, surgery, advanced radiology like CT scans, MRIs and PET scans, non-emergency ambulance, and certain prescription drugs. There are many other services that require prior authorization, so be sure to check.
When getting a new prescription, you should ask your doctor if it requires prior authorization. You don’t want to go to the pharmacy and find out that they couldn’t fill it because the doctor did not get it prior authorized. Your insurance plan's formulary, which is available online, clearly shows which drugs require prior authorization.
Most people will never have to deal with this, but if you have to, please understand that these are guidelines that can’t be circumvented, If your provider submits the necessary documentation and the proposed treatment is medically sound and appropriate, there is a very good likelihood that the prior authorization will be approved.
You can always refer to the benefit summary and certificate of coverage for your plan for details on prior authorization requirements. The customer service department at the insurance carrier can also be called. We are here to help if the need arises.