Legal Glossary
Prior Authorization
A requirement that your doctor get approval from your insurance company before providing certain treatments, medications, or procedures.
Legal Definition
Prior authorization (also called pre-authorization, pre-certification, or prior approval) is a requirement by a health insurance plan that a healthcare provider obtain advance approval from the insurer before delivering a specific service, medication, procedure, or referral to a specialist. The insurer reviews the request to determine whether the treatment meets its criteria for medical necessity before agreeing to cover it. Without prior authorization when it's required, the insurer may deny the claim entirely — leaving the patient responsible for the full cost regardless of the medical need.
In Plain English
Prior authorization is your insurer's permission slip system. Before your doctor can prescribe certain expensive drugs, perform certain procedures, or refer you to a specialist, they have to ask your insurance company for permission first — proving the treatment is 'medically necessary' by the insurer's criteria. If they don't get approval, or if the insurer says no, the treatment may not be covered at all. This is one of the most frustrating parts of the U.S. health insurance system. Approval can take days to weeks; in urgent situations, the delay can affect care. If your insurer denies prior authorization, you have the right to appeal. As of 2024, new federal rules require insurers to process urgent prior authorization requests within 72 hours and non-urgent requests within 7 days.
Real-World Example
Tom's doctor prescribes a brand-name medication for his condition. The medication requires prior authorization from Tom's insurer. The doctor's office submits the prior authorization request with supporting medical records. The insurer reviews the request and determines the medication is medically necessary — approval granted. Tom's prescription is covered at his plan's formulary cost-sharing. If the insurer had denied it, the doctor would need to either appeal with additional documentation, prescribe an alternative the insurer does cover, or Tom would pay out-of-pocket. Many denied prior authorizations are approved on first appeal.