What is prior authorization in medical billing?
Prior authorization is a payer review process that may require approval before certain services, treatments, drugs or equipment are provided or paid. The request commonly includes patient, provider, service and clinical information. An authorization documents the payer decision for the requested scope; it does not guarantee claim payment because eligibility, coding, documentation and other claim rules still apply.
What prior authorization means
A payer may require approval before certain non-emergency services, procedures, equipment or treatments. The provider usually submits clinical and administrative information so the payer can determine whether its coverage criteria are met.
Typical authorization data
- Patient and insurance identifiers.
- Ordering/referring and servicing provider information.
- Requested service or item.
- Diagnosis or clinical indication.
- Planned date, location and quantity/units when relevant.
- Medical records or other supporting documentation required by the payer.
Authorization record
Status
Pending, approved, partially approved, denied, pended for information or other payer-specific state.
Scope
Approved service, units/visits, provider/facility, dates and other restrictions.
Reference
Authorization/reference number and documented payer response.
Quick knowledge check
Should staff assume every service needs authorization?
No. Requirements depend on the payer, product and service.
What should be checked after approval?
The approved service, dates, quantity/visits, provider/facility and authorization number or other restrictions.
Does an authorization guarantee payment?
No.
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