The Ultimate Prior Authorization Cheat Sheet
June 13, 2023
When you’re stuck in it, the healthcare maze can seem endless. But zoom out and see it from above, and the stress will melt away. We’re starting from the beginning, with the first post in a series of explainers addressing the many steps between getting approved for healthcare and getting reimbursed for it. Let’s talk about prior authorizations.
If you’re in need of a prior authorization for medication or a medical service, or you simply want to know more about the process, you’re in the right place. This prior authorization cheat sheet has all the info you need. We’ll cover what prior authorizations do, when and why they’re needed, how long they take, and more.
What is prior authorization and when is it needed?
Prior authorization, also known as prior auth, pre-authorization, or pre-certification, is a process used by insurance companies to determine if a proposed medical service, prescription medication, or equipment is medically necessary. If it is, it should be covered under a patient's insurance policy. It's essentially a check performed before certain medical services are rendered to see if the insurance will cover these services.
Prior authorization is typically required for more expensive, non-emergency services like MRIs, CT scans, certain surgeries, or costly medications. The intent is to control costs and avoid unnecessary procedures or medications by getting approval in advance.
However, it's important to note that prior authorization doesn't guarantee the insurance company will cover the cost. It's merely an indication that the proposed treatment is medically necessary. A number of things can happen to change your reimbursement status after prior authorization. Specialist visits, like a trip to an out-of-network chiropractor’s office for instance, can be more complicated. For a better understanding of the payment and reimbursement side, read our Complete Guide to Out-of-Network Reimbursement.
How long does a prior authorization take?
Typically, prior authorization takes between 24 to 72 hours. But the duration of the prior authorization process can vary depending on the insurance company and the complexity of the request. For more complicated cases or when additional information is needed, it might take up to 30 days.
For urgent medical situations, a decision is usually expedited and can be given within a few hours. Still, it's recommended to start the process well in advance of scheduled procedures to avoid delays in treatment.
The prior authorization process flow
A prior authorization process typically begins with the healthcare provider identifying the need for a service or medication that requires prior authorization. From there, the key steps often include:
Identification of Need: The provider determines the patient's need for a procedure, medication, or equipment that requires authorization.
Submission of Request: The healthcare provider or their staff submits the authorization request to the insurance company. This usually involves filling out a specific form and providing detailed information about the patient's medical condition and the planned treatment.
Review by Insurance Company: The insurance company reviews the request, which may involve their own medical experts. They may approve, deny, or ask for additional information.
Communication of Decision: The insurance company communicates their decision to the healthcare provider and the patient.
Treatment or Appeal: If approved, the provider proceeds with the treatment. If denied, they may appeal the decision or consider alternate treatments.
For a more detailed look at the process, see the flow chart below.
prior authorization process flow chart
Note: This flow chart comes from a study called “Examining the prior authorization process, patient outcomes, and the impact of a pharmacy intervention: A single-center review” in the Journal of the American Academy of Dermatology. For citation and usage rights information click here.
What is a pharmacy liaison?
If you’re wondering what the red box in the above flow chart means, it may help to learn more about a “pharmacy liaison.” Knowing your rights and advocates as a patient can save you considerable time and money. Pharmacy liaisons (also known as pharmacy patient advocates) aim to improve patient care and optimize medication use.
Pharmacy liaisons serve as a bridge between patients, healthcare providers, and pharmacies. They typically work in a hospital or clinic setting, although they may also work in retail or specialty pharmacies. The specific interventions performed by a pharmacy liaison can vary but often include:
- Prior Authorization Assistance: Pharmacy liaisons can help with the prior authorization process, ensuring that patients can access necessary medications that require insurance approval. In this case, a pharmacy liaison intervention may be necessary for circumventing a prior authorization denial.
- Medication Reconciliation: Pharmacy liaisons ensure that all medications currently being taken by a patient are accurately documented, including prescription drugs, over-the-counter medications, and dietary supplements. This can help prevent potentially harmful drug interactions and duplications.
- Patient Education: Pharmacy liaisons provide education on medication usage, potential side effects, and the importance of adherence to prescribed medication regimens.
- Communication and Coordination: They facilitate communication between patients, healthcare providers, and pharmacies, ensuring everyone is on the same page regarding a patient's medication regimen.
- Financial Assistance: Pharmacy liaisons may help patients find ways to afford their medications, such as by connecting them with patient assistance programs or helping them understand their insurance benefits.
- Medication Adherence Monitoring: They track whether patients are taking their medications as prescribed and follow up with patients who are not adherent.
By performing these and other interventions, pharmacy liaisons help to improve medication safety, adherence, and overall patient health outcomes, while also reducing healthcare costs by avoiding unnecessary hospitalizations or other adverse events related to medication use.
How is prior authorization automation changing things?
Years ago, electronic prior authorization accelerated the process significantly. It eliminated the need for lengthy phone calls or manual paperwork, allowing healthcare providers to submit requests electronically and get faster responses. Now, a new advance is modernizing how we deal with prior authorizations.
Prior authorization automation reduces the time, resources, and potential errors involved by streamlining the review process for insurers. With an automated system, it’s easier for insurers to gather necessary information and make decisions. Additionally, automated systems can track and analyze data, providing valuable insights for improving the prior authorization process.
This often leads to increased patient satisfaction and greater efficiency for both healthcare providers and insurance companies. Treatments can be started sooner, and healthcare providers can focus on doing what they do best: providing quality care. Click the Get Started button to learn more about how SuperBill for insurance is streamlining the whole medical payment process, from prior authorization to claims reimbursement.
What to do if your prior authorization is denied...
Prior authorization denial does happen from time to time. If your prior authorization is denied, it's important to understand the reasons for the denial, which the insurance company should provide. Sometimes, it could be due to simple errors or missing information, which can be corrected and resubmitted.
If the request is denied due to the insurance company's judgment about the medical necessity or appropriateness of the treatment, healthcare providers can initiate an appeal process. This usually involves providing additional information or documentation supporting the need for the treatment. Patients can also get involved by talking to their employer's benefits department or state insurance commissioner, or by seeking help from patient advocacy groups or a pharmacy liaison.
It's crucial to remember that denial is not the end of the road but rather a signal to seek further clarification and persist in advocating for the patient's health needs. For help with appeals, read our post on How to Write a Letter of Appeal, or sign up for SuperBill and let us file and appeal your claims for you. We’ll make sure you get the best treatment and reimbursement available under your plan.