In some situations, insurance companies may require that their financial coverage for a procedure, medication, diabetes-related device, or a medical treatment be authorized prior to its fulfillment. There are two different authorization processes, “Pre-Authorization” and “Prior Authorization.”
Pre-Authorization vs. Prior Authorization
A Pre-Authorization requirement is an approval by an insurance company for a procedure or confirmed diagnosis of a specific medical condition. Only after a Pre-Authorization, will financial coverage be provided, according to the terms of the chosen insurance plan benefits for medical services.
A Prior Authorization is an approval by an insurance company for prescriptions, including medication, durable medical equipment, and medical supplies. Again, only after a Prior Authorization, will financial coverage be assessed, according to the terms of the insurance plan benefits.
Pharmacy Prior Authorizations
When a medication is prescribed for the first time or when a renewal is mandated, the pharmacy directly submits to us, as your healthcare provider, the need for a Prior Authorization.
The request from the pharmacy will include the information we will need, as required by the patient’s insurance company, to process the request and in an effort to receive an approval.
Medical Device Prior Authorizations
When a medical device, like an insulin pump or a continuous glucose monitoring system (CGMs) is prescribed for the first time, like any other prescription, the pharmacy or durable medical equipment provider directly submits a Prior Authorization request to the insurance carrier.
The insurance provider often requests documentation from us, as the prescribing doctor’s office, depending on the insurance plan. Diabetes related devices commonly require a Prior Authorization to confirm the patient has diabetes and meets the requirement for coverage.
Procedure Pre-Authorizations
Insurance plans have their own terms and conditions of financial coverage for medical procedures. In general, the more expensive the procedure, the more likely the insurance company will require a Pre-Authorization. Insurance companies want to verify that costly procedures are of medical necessity before they are approved.
Levels of Financial Coverage
Insurance companies, including Medicare and Medicaid, have varying levels of financial disbursement. Within each insurance carrier, there will be various plans from which a person can choose. Each plan will typically have differing levels of financial coverage and associated premium costs to the patient.
It is important to note that it is common that a patient will not know the out-of-pocket cost of an insulin pump or the related supplies, for example, from the supplier without completing the required paperwork. For this reason, insurance companies may want to verify that the request for a financial benefit falls within the plan that is being purchased by the patient, based on the varying levels of plan coverage.
Through a Prior or Pre-Authorization, insurance companies verify, before a device or medication is dispensed, or a procedure is performed, that it is covered by the chosen insurance plan. If there is no coverage in the plan, the authorization may be denied.
Tips for Faster Authorizations
For faster authorizations, make sure that we have the following information, and that it matches your insurance records:
- Full name
- Accurate date of birth
- Insurance plan and specific plan name
- Prescription (Rx) identification number
Delay Example: If you are registered as “Thomas” with your insurance company but as “Tom” with either us or your pharmacy, it will cause delays.
The following will also help expedite the process:
- Make sure your insurance premiums are paid on time
- Select a pharmacy that is familiar with our providers
- Don’t delay the request
- For pumps, sensors and supplies, visit our 7 Steps to Uninterrupted Diabetes Supplies webpage
FAQs
1. Who is requiring the Pre-Authorization or Prior Authorization?
Your insurance company is the entity that is requiring the authorization.
2. Why do I need a Pre-Authorization or Prior Authorization?
Both Pre-Authorizations and Prior Authorizations are a requirement from your insurance company. If you would like your insurance company to pay for the service, device or medication, they may require authorizations before they will pay according to the plan in which you are enrolled. This is an insurance company verification of financial coverage.
3. Who is responsible to request and receive the authorization?
Ultimately, it is the patient’s responsibility to get the appropriate authorizations, however, our office or pharmacy may make the recommendation on your behalf. We do this to assist our patients and minimize delays in prescribed treatment.
4. What can I do if my authorization is denied?
If your authorization is denied, you can always appeal the decision directly with your insurance carrier. If needed, a “Letter of Medical Necessity” can be requested from your doctor.
Most denial letters will include information about how to submit an appeal. Appeals are not usually successful unless you include information or details that were not part of the original Prior Authorization or the prior approval items requested.
If you request a “Letter of Medical Necessity” from your doctor, please be as specific as possible about why the product/medication/service was denied. You are responsible for submitting an appeal on your behalf.
5. How long does a Pre-Authorization or Prior Authorization take?
Prior Authorizations for prescriptions typically take less than two weeks but there are many variables. In some cases, the Prior Authorization can take a month or longer depending on the demand on the insurance carriers at any given time. Pre-Authorization timelines are similar to Prior Authorizations.
6. Can I get my medication, even if my authorization is denied?
You can always get your prescriptions filled without billing insurance. You would simply pay the full cost of the prescription. In some cases, there may be self-pay discounts or manufacturer assistance programs.
7. Can I dispute a denied authorization?
In a Prior Authorization/Pre Authorization scenario, your insurance company does not routinely pay for the disputed product or service. They are willing to allow your provider to submit additional information with substantiating medical documentation in an effort to reconsider their stance on payment. If a Prior Authorization/Pre Authorization is approved, the insurance company has conceded to pay for the heretofore uncovered charges.