What is prior authorization and when is it typically required?

• A. A pre-approval process required by the insurer before coverage of a service or drug is provided
• B. A post-approval process after service
• C. A discount program
• D. An optional step for all services

Answer: (D)

Prior authorization is a pre-approval process an insurer uses to confirm coverage before a service or drug is provided. It helps ensure the treatment is medically necessary and appropriate, and it helps control costs. Providers submit documentation to the plan, which reviews criteria like medical necessity, step therapy, and guidelines before approving or denying coverage. This is typically triggered for high-cost items, specialty medications, certain imaging or procedures, and other defined services, and it varies by plan. It is not a post-service approval, not a discount program, and not optional for all services; it’s required for specific services or drugs as defined by the insurer.