What is the purpose of prior authorization in drug coverage?

• A. A process requiring plan approval before coverage; the plan or its designee approves or denies
• B. A guarantee of coverage for any prescribed drug
• C. A method to determine drug price after dispensing
• D. A patient-only approval process without plan involvement

Answer: (A)

Prior authorization is a plan-driven step in drug coverage that requires the plan or its designee to review a prescription before the drug is covered. This review checks whether the medication is medically necessary, appropriate for the condition, and aligns with the plan’s formulary and utilization-management rules. If approved, the drug is covered under the member’s benefits; if not, coverage may be denied or an alternative covered option or an exception process may be pursued. It isn’t a guarantee that any drug will be covered, it doesn’t set or reveal the drug’s price after dispensing, and it always involves the plan rather than being a patient-only approval.