Almost 10% of U.S. residents lack health insurance coverage. Even those with health insurance policies find it difficult to understand what is and isn’t covered.
To help you with the details of your policy, you need to know the differences between predetermination vs. prior authorization. Keep reading to learn more.
What Is Prior Authorization?
Prior authorization, also known as prior approval, is a pre-service medical necessity review. Insurance companies will review whether or not the requested service or drug is covered under the member’s health policy.
Not all drugs and services require prior authorization. Prior authorization for medical services is not a benefit or payment guarantee. These are common medications and treatments that may require prior authorization:
- Expensive medications and treatments
- Drug combinations or interactions that might be unsafe
- Drugs and medical treatments prescribed for unique health problems
- Commonly misused drugs
- Behavioral services
- Drugs used for cosmetic purposes
Medical providers usually hold the responsibility of requesting prior authorization before performing a service. Some plans require members to complete this.
If a member doesn’t get pre-approved, the service or drug might not be covered. An insurance company will look into the following information if you do not get prior approval:
- Medical policies
- Member benefits
- State and federal requirements
- Other clinical guidelines
Medicare members must get prior authorization if they want reimbursement for medical drugs or services.
What Is Predetermination?
Predetermination is a voluntary utilization management review of a medical procedure, test, or treatment. Predetermination is not needed for drugs and services on the prior authorization list.
Members use this when they are unsure about their coverage. It can determine whether a medical service is necessary.
Submitting predetermination won’t guarantee coverage, but you should obtain one if the services aren’t covered.
It’s recommended to get a predetermination review for these procedures:
- Breast reduction
- Dental surgery
- Sacroiliac (SI) joint injections
During the post-service utilization management review, a provider will review medical documents. This will determine whether a service was medically necessary and/or covered under the health plan.
You might be asked to provide additional information during this time.
Predetermination vs. Prior Authorization
When it comes to predetermination vs. prior authorization, there are some differences. An insurer will approve a prior approval if the service meets certain criteria:
- Medically necessary
- Covered under the patient’s health plan
- Most economical treatment option available
- Delivered in an appropriate setting
- Is not being duplicated
The goal is to make sure health care is cost-effective and safe for the patient.
Predeterminations are used for these reasons:
- Determination of medical necessity
- Uncertainty about coverage
- Confirmation of insurer payment amount
The goal of predetermination is to inform patients about their insurance plans. Members pay the bill when medical treatment isn’t covered.
Predetermination vs. prior authorization is commonly talked about in the medical insurance sector. If you need to know more about your healthcare plan, request these services.
Now that you have a better understanding of each, you can get the care you need. Keep coming back for blogs like this on our website.