Prior authorizations were introduced in the 1960s after Medicare and Medicaid legislation. Their main use was to verify a patient’s admission into a healthcare facility and the need for treatment based on a confirmed diagnosis by two healthcare providers. Today, per some health insurance plans, you need approval from your insurer before getting certain treatments and medications. This is especially true when said treatments are not part of your Preferred Drug List (PDL). You get this approval by filling out a prior authorization form. Here is everything you should know about it.
What Is a Prior Authorization?
Prior authorization (PA) is a management process utilized by health insurance companies to determine if the policy will cover the cost of treatment or medication prescribed to the insured party. Medical services like surgery and imaging are usually subject to this process. Essentially, the healthcare provider seeks approval from the patient’s health plan to proceed with the prescribed treatment.
The prior authorization process can often be time-consuming and delay patients from obtaining the necessary care. Prior authorization can also be referred to as:
- Preauthorization
- Preapproval
- Precertification
If an insurance company denies a prior authorization request, it will mean that it will not cover the cost of the treatment if the patient goes ahead with it.
How Does Prior Authorization Work?
Typically, your prior authorization request and the insurance company responds based on in-house reviews by medical doctors and clinical pharmacists. Your request will either be approved or denied. Sometimes, the company may ask for more information or suggest you try an alternative treatment that is more affordable and just as effective as the prescribed option.
If your insurer denies your prior authorization request, you can file for a review of the insurer’s decision. Another rejection will mean you forgo the treatment or pay for it yourself. If your application goes through, you can receive the treatment, and the insurer will pay for it.
What Is a Prior Authorization Form?
A prior authorization form is a formal document filled out by a healthcare provider or patient requesting permission to give or receive medical intervention. It comes into play when a physician prescribes a treatment or medication not included in the insurance provider’s preferred drug list (PDL). On the form, the physician (prescriber) must explain why the medication is medically necessary and appropriate for the patient.
Essential Elements of a Prior Authorization Form
A prior authorization form should provide information about the prescribed medication and its usefulness in the current situation. It should convince the insurer to approve the treatment even though it does not typically cover it. To do this, the form must include the following:
- Physician’s Details: In the first section of the form, you should provide the name, department, and contact details of the physician or healthcare provider. List the name of the hospital.
- Patient Information: Also indicate the name, age, height, weight, gender, contact information, and address of the patient. You can also include allergies, medications, etc.
- Insurance Provider Information: In the third section, identify the patient’s primary insurance provider by name, address, and ID number. You can include a secondary insurer, where applicable.
- Diagnosis: Explain the patient’s diagnosis that has necessitated the prior authorization request.
- Prescription Information: Here, the requestor or physician should indicate the name and dosage of the prescription, noting whether it is a renewal or new treatment. If the patient has taken the medication before, this section should include a treatment date and duration.
- Prior Medications: If the patient has tried other treatments before, indicate the prescription name, treatment date, and duration. Explain why the treatment failed.
- Medical Explanation: This is where you justify the request. Why is this particular treatment crucial to the patient’s health? You can attach supporting medical documentation.
- Signature and Date: Lastly, the form should include the physician’s signature and the signature date.
FAQs
Insurance companies use prior authorization to save money on treatments they consider expensive or unnecessary, especially where a cheaper treatment would be effective. Hospitals, on the other hand, use this process to protect themselves from unpaid medical bills when an insurer refuses to pay for a treatment already provided to the patient.
Yes, prior authorization is needed for various medical services for patients under Texas Medicaid or any other State health care program. If the drug or treatment you need requires prior authorization, you can fill out the form in writing or through the Texas Medicaid portal.
If a patient fails to obtain prior authorization, their health insurance provider will not pay for the drug or treatment. The options, in this case, include filing for an appeal, accepting an alternative treatment, or paying for the prescribed treatment out of pocket.
Primarily, procedures deemed to be high-risk or costly require prior approval. For many insurance providers, the following procedures need prior authorization:
ᐅ Diagnostic imaging like MRIs/MRAs, CTs/CTAs, and PET scans
ᐅ Medical equipment like at-home oxygen, patient lifts, and wheelchairs
ᐅ Experimental drug trials
ᐅ Cosmetic surgery
ᐅ Organ transplants
Usually, preauthorization takes five to ten days after the insurer receives the preauthorization request. This may vary depending on the situation.
A referral is an official recommendation by your primary physician to see another practitioner, usually a specialist, for health care services or consultation. Your primary physician will refer you to another practitioner when they are not in a position to provide the care you require. In contrast, insurance providers give medical practitioners prior authorization to approve a patient for a medical procedure or drug. It tells the healthcare provider that your insurer will cover the cost of the treatment.
It is advisable to fill out a prior authorization form immediately after you find out you will need it to avoid any delays. You should also ask your doctor to fill one rather than do it yourself. Because they work with insurers regularly, your doctor may know how to get the form before the right eyes faster.
In case your health insurer denies your prior authorization request, you can file for an appeal. The insurer is mandated by law to tell you why it denied your initial request. From there, you can make the necessary changes and or submit new documentation. Sometimes, your health plan may recommend you try other methods.
Final Thoughts
Prior authorization requires a healthcare provider (or patient) to obtain approval from a health insurance company before providing or receiving certain treatments, procedures, or medications. The American Medical Association (AMA) greatly supports the reduction of medical services requiring filling out a prior authorization form. This is because the authorization process can be long and prevent patients from getting the help they need. If necessary, a prior authorization form ought to be automated and standardized to lessen the burden imposed on physicians.
