Prior authorization is not only a formality but a prerequisite for a provider’s reimbursement.
Simply put, prior authorization is a consent that you need from an insurance company before starting certain treatments.
Skipping authorization can cause delays in patient care and hefty denials for the provider. Insurers say it helps avoid unnecessary care. But for providers and staff, it’s often a slow and frustrating process.
So, if you are a small clinic or a busy group, it is wise to have a firm grasp on prior authorization. This will keep you informed and help you reduce denials.
In this blog, we’ll walk you through:
- What does authorization mean in medical billing
- Different types of authorizations (yes, there’s more than one)
- What do step therapy and quantity limits really mean
- How the prior auth process works, step-by-step
- Why it matters for providers, revenue, and patient care
- How to manage prior authorizations from major insurers like Cigna, Aetna, and BCBS
- And finally, how to outsource prior authorization
What is Authorization in Medical Billing?
Authorization means getting approval from the insurance company before giving care. Without it, payment may be denied. This step helps payers control what they spend. They want to be sure the care is needed.
Prior authorization evolved somewhere between the 1980s and the 1990s when managed care models were becoming very popular in the United States.
Managed care models were formed to reduce unnecessary healthcare spending. Today, almost all insurance companies (commercial payers, Medicare Advantage plans, and Medicaid programs) have pre-approval systems to monitor care decisions before approving payments.
Common Services Which Require Prior Authorization
Not all services require prior authorization. But many high-cost or high-risk ones do.
Here are some common examples:
- MRI, CT scans, and other advanced imaging
- Surgeries that aren’t urgent
- Certain prescription drugs
- Physical therapy beyond a set number of visits
- Mental health services or inpatient care
- Durable medical equipment (like wheelchairs or oxygen machines)
- Home health care
Types of Authorization in Medical Billing
1. Medication Prior Authorization
Some drugs need approval before insurance will pay. This often applies to costly, brand-name, or high-risk meds. The doctor has to explain why that drug is needed instead of a cheaper one. Sometimes, the plan wants proof that other drugs didn’t work. If denied, the patient may have to try something else or pay full price. This slows down care and adds work for the doctor and staff. Pharmacies also get stuck, they can’t fill the prescription until it’s approved.
Drugs that often need prior authorization include:
- Cancer or MS medications
- Brand-name drugs with generic options
- High-cost injectables or biologics
- Medications with a high risk of misuse
- Drugs not on the plan’s approved list (formulary)
2. Diagnostic Prior Authorization
Some sorts of tests come with a high bill like, MRIs, CT scans, and PET scans. This is why most insurers will require pre-authorization, and they desire to get a test pre-approved before they cover the bill. Insured patients must be very careful to ensure that the provider shows their condition and shows that the test makes a difference. If the provider’s paperwork is ambiguous or incomplete the authorization request may be denied or simply stalled. This stalls the diagnosis and treatment ultimately. Certain scans may have frequency limitations depending on the plan.
3. Surgical Prior Authorization
Most surgeries need approval unless it’s an emergency. The insurance plan checks if the surgery is necessary and covered. The provider sends in test results, patient history, and notes. Even small or routine surgeries may need this authorization. Some plans have strict rules based on the type of surgery. If there’s a delay, the patient may have to wait longer. That can affect care and create stress for everyone involved.
4. Treatment Prior Authorization
Ongoing care like physical therapy, chemo, counseling, or radiation often needs approval. Plans usually allow a set number of sessions at first. Once those run out, the provider must ask for more. If the request is delayed, treatment may be put on hold. This can interrupt progress and frustrate patients. The provider also has to track each visit and know when to renew. It’s one more layer of work added to an already busy schedule.
5. Concurrent Authorization
This type of approval is needed while care is still going on. It’s common during hospital stays or inpatient treatment. The provider must send updates to the insurance company, often daily. The insurer reviews the case and decides if more days can be approved. If the stay goes past what was approved, extra days may not be covered. That can lead to billing issues. It takes close updates between the care and billing staff to avoid problems.
6. Retrospective Authorization
This happens when care is given before getting approval, usually in emergencies. After treatment, the provider sends a request to the insurance company. They review the case to see if the care was truly needed. If approved, they’ll still cover the cost. If denied, the patient or provider may have to pay. It’s risky because there’s no guarantee of payment. Quick follow-up and clear records are key to getting it approved.
Step-by-Step Prior Authorization Process
1. Check if Prior Authorization is Needed
Start by checking if the patient’s insurance requires prior authorization. You can do this on the payer’s portal or by calling support. Every plan is different. What needs approval under one may not under another. Always verify before scheduling tests, procedures, or prescriptions.
2. Gather Patient and Clinical Information
Once you have verified the requirement for prior authorization, verify that you have the correct documentation. The documentation includes patient demographics, plan numbers, diagnosis codes, test results, and notes from the provider. While some payers only want straightforward prior authorization, some payers want documentation of treatment history or documentation that other options were unsuccessful. You should ensure that every complete and unambiguous.
3. Submit the Authorization Request
You now send the request to the payer. This is often done through a web portal, fax, or sometimes by phone. Each insurance company has its preferred method. Always use their forms and follow their checklist to avoid rejections. Note down submission dates for tracking and follow-up.
4. Wait for a Decision
After submission, the insurance company reviews the request. They may approve it, deny it, or ask for more information. Some respond in 24 hours. Others take several days. Medicaid and Medicare Advantage often follow strict timelines. Until a decision is made, the care is usually on hold. This delay can affect scheduling and treatment planning.
5. Respond to Any Requests for More Info
If the insurer asks for more documents, don’t wait; respond fast. Delays here can reset the review clock. Make sure the new info is complete, accurate, and easy to follow. This step often makes or breaks your approval.
6. Get the Final Decision
Once the review is done, the insurer makes a decision. If approved, you can move forward with care and billing. If denied, let the patient know right away and plan what to do next.
Always save the approval or denial letter it may be needed later. Documentation is key.
7. Appeal if Needed
If you disagree with the denial, file an appeal. This means sending more records, a doctor’s note, or proof of urgency. Some appeals are quick, others take a full case review. You can also ask for a peer-to-peer review with the insurer’s medical team. Act fast, most appeal deadlines are tight.
Benefits of Prior Authorization
Prior authorization can be frustrating, but it can also be beneficial! When it is used properly, it can be an asset to the patient and the healthcare system.
1. Prevents Unnecessary Care
Some care just isn’t needed. A patient might ask for an MRI when an X-ray would be enough. Prior authorization can help facilitate the early identification of the problem for the provider and inhibit the insurer from making it a problem later in the patient’s care and health. There can be big savings in dollars and less chance that patients are perhaps going through testing or treatment that may not be necessary.
2. Controls Healthcare Costs
Medical care is expensive for everyone. Prior authorization lets payers look at the cost before saying yes. Payers can also ask for less expensive options that still have a high level of success. In addition, it is also a preventative mechanism to prevent fraud and billing for services that did not occur. In the long-run, it is an initial step to reduce costs and therefore costs, premiums.
3. Encourages Evidence-Based Care
Insurers use clinical guidelines to review requests. This helps doctors follow proven treatment paths. It keeps care current and based on research, not habit. When treatments are backed by evidence, patients usually see better results.
4. Reduces Drug Misuse
Some drugs come with serious risks if misused. Prior authorization helps catch unsafe doses or risky combinations. It also flags drugs that are often overused, like opioids. Doctors may be asked to switch to safer or cheaper options. That protects patients and helps manage pharmacy costs.
5. Creates a Review Layer
Many requests are checked by a medical team on the insurer’s side. They look for red flags, like a test that doesn’t fit the diagnosis. This second review can catch errors before they harm the patient. It’s a small step that helps prevent bigger problems later.
6. Supports Better Plan Management
Insurance companies have to manage care for thousands, even millions of patients. Prior authorization helps them keep track of what care is being given and why.
This allows them to see trends, catch overuse, and set smarter rules for the future. It also helps keep care more consistent between patients with the same condition. That can lead to better outcomes on a larger scale.
Prior Authorization Services for Healthcare Providers
Handling prior authorizations in-house takes time. A lot of time, indeed!
For busy clinics, it can feel like a full-time job. BilNow takes that work off your plate.
We handle the complete prior authorization process from start to finish.
Here’s what we do on your behalf:
- Check if prior authorization is needed based on the patient’s insurance and treatment.
- Prepare and submit requests with the right codes and documents.
- Follow up with payers to check status or send more info when needed.
- Handle appeals if an auth is denied.
- Work with your EHR or billing system to avoid double entry and speed things up.
It doesn’t matter if you’re a small clinic or a large group. We help make sure your care is approved, billed, and paid without delay.
With BilNow, you don’t just get support. You get results that keep your revenue flowing smoothly.
Prior Authorization from Top Insurance Companies
Each insurance company has its own portals and requirements for prior authorizations. To make it easier, we’ve put together a quick-reference table with how to get prior authorizations from some of the biggest payers in the U.S.
| Insurer | How to Get Prior Authorization |
| Express Scripts | Submit via their provider portal or call the prior auth support line |
| Aetna | Use the Availity portal for electronic submissions or fax the required forms |
| Caremark | Send through their ePA (electronic prior authorization) system |
| Tricare | Submit via the Humana Military provider portal or call for military-specific requirements |
| Humana | Use the secure Humana provider portal; some services may require a fax with clinical documentation |
| Cigna | Submit through CoverMyMeds or use the Cigna for Health Professionals platform |
| BCBS Federal | Fax completed prior authorization form with supporting clinical notes |
Outsourcing Prior Authorization Services to BilNow
Prior authorizations are necessary, but they can be a serious drain on your time and staff. If your team is juggling phone calls, forms, and payer portals more than actual patient care, outsourcing your prior authorization process might be the smartest move you make this year.
We stay updated on state laws, formulary changes, and payer rules to make sure your requests get approved.
How to get started?
A quick consultation is all it takes. We’ll walk through your needs, evaluate your workflows, and customize a solution that takes prior authorizations off your plate.
Ready to free up your front desk and reduce delays?
Frequently Asked Questions (FAQs)
1. How long does it take to get pre-authorization?
Pre-authorization times depend on the insurance company and the process complexity. However, it usually takes a few days to a few weeks.
2. What happens if I don’t get pre-authorization?
If you do not get pre-authorization your insurance will likely be denied and will cost high on pockets.
3. Can pre-authorization be appealed if denied?
Yes, you can appeal the decision. Furthermore, the healthcare provider can submit additional documents or clarification to reduce denial.
4. Does pre-authorization guarantee that my insurance will pay for the service?
No, pre-authorization does not guarantee full payment. The insurer can deny payment on factors including exclusion or limitation in the plan.
5. What is the Prior Authorization form?
The prior authorization form is a prerequisite document that is required by health insurers to verify if the treatment to be given is medically necessary and within the authorized insurance plan.
6. Why do you need to outsource Prior Authorization to BilNow?
BilNow has expertise in offering prior authorization services to all healthcare facilities, whether it’s a solo provider or a large hospital. We overcome denials and your precious time to help you stay focused on paperwork.
