What is Prior Authorization?

Learn more about prior authorization, the process to get pre-approval, and the impact of the No Surprises Act.

Prior Authorizations

Under medical and prescription drug plans, some treatments and medications may need approval from your health insurance carrier before you receive care.

Prior authorization is usually required if you need a complex treatment or prescription. Coverage will not happen without it. That’s why beginning the prior authorization process early is important.

Ask your health care provider if a prescription or medical treatment is going to require prior authorization so they can start the process immediately.

This is not the same as if you need additional treatments or prescriptions after your initial visit. In that instance, you may need to get a medical necessity review, or “authorization.”

NOTE: There are many terms that mean the same as “prior authorization,” including:

• Preauthorization
• Preapproval
• Precertification

They all mean the same thing.

Location Authorizations

Prior authorization may be needed before getting outpatient services in a hospital or hospital-affiliated facility. This “place of service” authorization may help guide providers and customers to a more cost-efficient location, while ensuring quality of care, when use of an outpatient hospital is not medically necessary.

What types of medical treatments and medications may need prior authorization?

• Medications that may be unsafe when combined with other medications
• Medical treatments that have lower-cost, but equally effective, alternatives available
• Medical treatments and medications that should only be used for certain health conditions
• Medical treatments and medications that are often misused or abused
• Drugs often used for cosmetic purposes

No Surprises Act

The No Surprises Act was enacted in 2020 and goes into effect on January 1, 2022. It provides federal consumer protections against unanticipated out-of-network bills called “surprise bills.”

Surprise bills arise in emergencies when patients typically have little or no say in where they receive care. They also arise in non-emergencies when patients at in-network hospitals or facilities receive care from providers (such as anesthesiologists) who are not in-network and whom the patient did not choose.

The law requires surprise bills must be covered without prior authorization and in-network cost sharing must apply.¹

How do I get a prior authorization?

If your health care provider is in-network, they will start the prior authorization process.

If you don’t use a health care provider in your plan’s network, then you are responsible for obtaining the prior authorization. If you don’t obtain it, the treatment or medication 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.

How does the prior authorization process work?

Typically, within 5-10 business days of receiving the prior authorization request, your insurance company will either:

• Approve your request
• Deny your request
• Ask for more information
• Recommend you try an alternative that’s less costly, but equally effective, before your original request is approved

These responses are based on input from clinical pharmacists and medical doctors who review the requests at the health insurance company.

If you’re unhappy with your prior authorization response, you or your health care provider can ask for a review of the decision.

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.

Why does my health insurance company need a prior authorization?

The prior authorization process gives your health insurance company a chance to review how necessary a medical treatment or medication may be in treating your condition.

For example, some brand-name medications are very costly. During their review, your health insurance company may decide a generic or another lower-cost alternative may work just as well in treating your medical condition.

How does prior authorization help me?

The prior authorization process can help you:

• Reduce the cost of expensive treatments and prescriptions by first requiring you to try a lower-cost alternative
• Avoid potentially dangerous medication combinations
• Avoid prescribed treatments and medications you may not need or those that could be addictive

Review your plan documents or call the number on your plan ID card for more information about the treatments, services, and supplies that require prior authorization under your specific plan.