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📋 '''Prior authorization''' is a cost-control mechanism used in [[Definition:Health insurance | health insurance]] and [[Definition:Workers' compensation insurance | workers' compensation insurance]] that requires a [[Definition:Policyholder | policyholder]] or healthcare provider to obtain approval from the [[Definition:Insurance carrier | insurer]] before a specific medical service, procedure, or prescription drug will be covered under the policy. Sometimes called pre-authorization or pre-certification, this process allows the insurer to evaluate whether the proposed treatment is medically necessary, appropriate for the diagnosis, and consistent with the plan's [[Definition:Coverage | coverage]] guidelines before committing to pay the [[Definition:Claim | claim]].

⚙️ When a provider determines that a patient needs a particular procedure or medication, the provider submits a request to the insurer along with clinical documentation supporting the medical necessity of the treatment. The insurer's [[Definition:Utilization review | utilization review]] team — often staffed by nurses and medical directors — evaluates the request against established clinical criteria and the specific terms of the patient's [[Definition:Insurance policy | policy]]. Decisions typically must be rendered within regulated timeframes, and if authorization is denied, the policyholder or provider can pursue an [[Definition:Appeal | appeal]] process. Some insurers have adopted [[Definition:Artificial intelligence (AI) | artificial intelligence]] tools and automated workflows to accelerate prior authorization decisions, though regulatory scrutiny around algorithmic decision-making in this area continues to intensify.

💡 The stakes surrounding prior authorization extend well beyond administrative convenience. For insurers, it serves as a critical lever for managing [[Definition:Medical loss ratio (MLR) | medical loss ratios]] and ensuring that plan funds are directed toward evidence-based care rather than unnecessary or duplicative procedures. For patients and providers, however, delays or denials in prior authorization can create friction that affects health outcomes — a tension that has driven state and federal regulators to propose reforms mandating faster turnaround times, standardized electronic submission processes, and greater transparency in denial rationale. Insurtech companies have identified this friction as a market opportunity, building platforms that streamline the submission and tracking of authorization requests across multiple [[Definition:Payer | payers]].

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Utilization review]]
* [[Definition:Medical loss ratio (MLR)]]
* [[Definition:Explanation of benefits (EOB)]]
* [[Definition:Health insurance]]
* [[Definition:Claims management]]
* [[Definition:Appeal]]
{{Div col end}}

Definition:Prior authorization - Revision history

PlumBot: Bot: Creating new article from JSON