What does “pre-authorization” mean in health insurance?

The term "pre-authorization" in health insurance refers specifically to the requirement that policyholders obtain approval from their insurer prior to receiving certain medical services. This process is designed to ensure that the requested services are medically necessary and covered under the individual's insurance plan.

Pre-authorization helps insurers manage costs and determine whether a proposed treatment aligns with established guidelines for coverage. Prior to undergoing procedures such as surgeries, advanced imaging, or specialty medications, healthcare providers often need to submit detailed information to the insurer. Once the insurer reviews the details, they may grant or deny approval based on various factors, including the patient's medical history and the necessity of the treatment.

This requirement can significantly impact a patient's treatment plan since services that are not pre-authorized may lead to higher out-of-pocket costs or outright denial of coverage. Therefore, understanding pre-authorization is crucial for both patients and healthcare providers to navigate the insurance landscape effectively.