What is meant by "prior authorization" in health insurance?

Prior authorization is a process in health insurance that requires healthcare providers to obtain approval from the insurer before delivering specific services or treatments. This requirement is put in place to ensure that the planned services are medically necessary and align with the insurer's coverage policies. By obtaining prior authorization, healthcare providers can confirm that the costs associated with the service will be covered, reducing instances of unexpected out-of-pocket expenses for patients.

This process helps control healthcare costs and improve patient care by encouraging the use of appropriate and effective treatments. It is an important measure for insurers to manage expenditures and ensure that provided services meet certain medical criteria before they are rendered. Therefore, the understanding of prior authorization is crucial for both healthcare providers and patients navigating the complexities of health insurance coverage.