Article | July 2018

What is Prior Authorization and How Does the Process Work?

What is prior authorization?

Under medical and prescription drug plans, certain medications may need approval from your health insurance carrier, before they’re covered. For example, if you’re a Cigna customer, these medications have a (PA) next to them on your plan’s drug list.

What types of medications typically need approval?

  • Those that may be unsafe when combined with other medications
  • Have lower-cost, equally effective alternatives available
  • Should only be used for certain health conditions
  • Are often misused or abused
  • Drugs often used for cosmetic purposes

Medications that require approval will only be covered by your plan if your doctor requests and receives approval from your health insurance company.

What’s the difference between prior authorization and pre-authorization?

None, these terms mean the same thing and are used interchangeably. However, most insurance companies will use the term “prior authorization” instead of “pre-authorization.”

How does the prior authorization process work?

Prior authorizations for prescription drugs are handled by your doctor’s office and your health insurance company. Your insurance company will contact you with the results to let you know if your drug coverage has been approved or denied, or if they need more information.

If you are unhappy with your prior authorization decision, you or your doctor can ask for a review of the decision. Or, your doctor may prescribe a different but equally effective medication. In some instances, your health insurance company may recommend you try an alternative medication that’s less costly, but equally effective, before the medication your doctor originally prescribed can be approved.

Who at my insurance company will be reviewing my prior authorization?

Clinical pharmacists and medical doctors at the insurance company are trained in reviewing prior authorizations.

Is prior authorization required in emergency situations?

No, prior authorization is not required if you have an emergency and need medication. However, coverage for emergency medical costs are subject to the terms of your health plan.

When should the prior authorization process begin?

Prior authorization is usually required if you need a complex treatment or prescription. Since coverage will not be authorized without it, beginning the prior authorization process early is important. Ask your doctor if a prescription medication is going to require prior authorization so they can start the process immediately.

How do I get a prior authorization?

Your doctor will start the prior authorization process. Usually, they will communicate with your health insurance company. Your health insurance company will review your doctor’s recommendation and then either approve or deny the authorization request. In some cases, your insurance company will ask for more information from your doctor in order to make a decision.

What if my prior authorization is rejected?

Typically within 5-10 business days of hearing from your doctor, your health insurance company will either approve or deny the prior authorization request. If it’s rejected, you or your doctor can ask for a review of the decision. Your doctor may also recommend an alternative medication for you—one that is equally effective and covered by your plan.

What do health insurance companies base prior authorizations on?

There are a number of reasons why your insurance company may require certain medications be reviewed and approved before your plan covers them.

The prior authorization process gives your health insurance company a chance to review how necessary a certain medication may be in treating your medical condition. For example, some brand name medications are very costly. During their review the insurance company may decide a generic or another lower cost alternative may work equally well in treating your medical condition. Other types of medications are dangerous when combined with others you may already be taking, others are very addictive, etc.

To avoid paying the full cost for medications that are not covered, ask your doctor if the medications you’re taking are covered under your plan. If they are not, ask for an alternative.

Prior authorization seems like a time-consuming process, what is the benefit?

Prior authorization can help lower the cost of expensive prescriptions by first requiring you to try a lower cost alternative that’s equally effective. The process also allows your health insurance company to review your prescriptions, looking for any potentially dangerous drug interactions that your doctor may have been unaware of when prescribing.

Prior authorization is designed to help prevent you from being prescribed medications you may not need, those that could interact dangerously with others you may be taking, or those that are potentially addictive. It’s also a way for your health insurance company to manage costs for otherwise expensive medications.

Besides prescription drugs, what else requires prior authorization under my plan?

Prior authorization may also apply to certain health care treatments, services and/or supplies. If you use a health care provider in your plan’s network, then the provider is responsible for obtaining approval from your health insurance company. If you don’t use a health care provider in your plan’s network, then you are responsible for obtaining the approval. If you don’t obtain prior authorization, the service or supply might not be covered or you may need to pay more out-of-pocket. Review your plan documents or call the number on your health plan ID card for more information about the treatments, services, and supplies that require prior authorization under your specific plan.