What is pre-authorization and when is it typically required?

• A. Pre-authorization is a billing code used after service.
• B. Pre-authorization is prior approval from the payer for certain procedures to confirm coverage.
• C. Pre-authorization is patient consent for treatment.
• D. Pre-authorization is required for all procedures regardless of payer.

Answer: (B)

Pre-authorization means you get prior approval from the patient’s insurance payer before performing a procedure to confirm that it will be covered and considered medically necessary. It’s not a billing code or something done after the service, and it’s not the patient’s consent for treatment. It’s typically required for high-cost, invasive, or specialized procedures, or when the payer’s rules for a specific plan and codes require verification of coverage before proceeding. If pre-authorization isn’t obtained when it’s needed, the claim can be denied or the patient may owe the cost. Some payers also offer a pre-determination (an estimate of coverage) but pre-authorization is the actual approval. Remember, not every procedure needs pre-authorization; requirements vary by payer, plan, and service.