A health plan may require that you meet specific criteria before a medical procedure or prescription drug is covered. The process of determining coverage is known as precertification. It's a way for the insurance carrier to manage costs and make sure they aren't paying for something that is unnecessary.
In simple terms, precertification means that someone other than your doctor has reviewed your medical situation and determined that the service you want to receive is “medically appropriate”. However, precertification doesn’t guarantee your insurance carrier will cover the service.
The precertification process may also be referred to as “preauthorization,” “prior authorization,” or “pre-admission authorization.”
When is a precertification needed?
Services that require a precertification vary from plan to plan and by insurance carrier. For the list of procedures that require precertification, refer to your plan document, login to your insurance carrier’s portal, or contact your carrier directly.
Services that are not considered an emergency may require precertification. It’s generally required for expensive radiology services such as ultrasounds, CAT scans, and MRIs. Inpatient admissions, behavioral health services, hospice, and surgeries may also require precertification.
- Before services are rendered, make sure you verify whether a precertification is needed.
- To reduce your out-of-pocket costs, use in-network medical providers.
Who is responsible for getting the precertification?
Your medical provider will need to obtain the precertification, but it’s your responsibility to make sure that it gets done.
On your behalf, your medical provider will:
- Submit documentation (such as your medical history and/or lab results) to show that a treatment, medical equipment, or prescription is medically necessary, and
- Get a coverage determination from the insurance carrier (approved/not approved).
Having a procedure without preauthorization from your insurance carrier could cost you. Ultimately, responsibility for payment is on the patient (even though your medical provider may choose to absorb some of the costs under specific circumstances).
So, while you’re still in the planning stages of a procedure, double-check that your medical provider has approval from your insurance carrier. Doing this may save you significant time and money...and a lot of hassle. Because your medical provider may reschedule non-emergency services until insurance coverage precertification comes through.
In an emergency situation, the hospital will contact insurance as soon as possible after the fact to obtain a retroactive authorization.
Is it a guarantee of coverage?
No. A precertification only means that a treatment has been approved as “medically appropriate.” Once the precertification claim has been submitted to your insurance carrier, several factors may be taken into consideration before your claim is paid or denied.
Factors that may impact a coverage determination include:
- Patient's eligibility status (as an example, 20 physical therapy sessions may be medically appropriate, but your plan may stipulate that only 10 sessions are eligible).
- Medical necessity, or
- How the insurance payer defines "covered services"
It may be useful to get your precertification in writing.
A precertification often has limits
When a precertification goes through, there are often limits on it. For example, your insurance carrier may approve a 3 days of inpatient services, or 10 physical therapy visits.
There's also usually an expiration date. If you use up all the authorized services, or go beyond the expiration date, notify your insurance carrier’s precertification department immediately.
Will my claim be denied without one?
Probably. Services provided to a patient that required prior authorization but didn't get it will likely be denied by the insurance payer. There are two exceptions:
- The services rendered were considered a medical emergency, and
- The service provider was able to get a retro-authorization within 24-72 hours after services were provided
Lack of Information Denial
If you get a lack of information denial, then the insurance carrier didn’t have enough information to make a decision. Work with your medical provider to quickly get any additional information so it doesn’t turn into a real denial.