You visit the doctor and get a new prescription. You may think that’s all you need to get it filled at your local pharmacy and covered by your health plan. Not so fast. Your plan may demand what’s called “prior authorization”. That means your doctor needs the express approval from your insurer before you get treatment, service, or prescription, otherwise, your plan won’t pay.
Prior authorization amounts to prior approval
Prior authorization — also known as precertification or prior approval — is a process that many health insurance plans impose before they agree to pay for care.
With prior authorization, the physician or healthcare provider must get the insurance company’s expressed approval for a particular drug or procedure, or the insurer won’t cover the cost.1
Once the insurance company receives your provider’s request, the company will review it and approve or deny it, in a process that can take a few days or a few weeks.
Why do I need prior authorization?
Prior authorization is controversial. According to health insurance companies, it is needed to prevent unnecessary and wasteful care. The industry says prior approval accomplishes the following:
- Prevents drugs from being prescribed by multiple doctors — or even just one — that, taken together, could cause dangerous side effects;
- Ensures that procedures and treatments meet FDA guidelines for the condition being treated;
- Makes sure that providers follow nationally-recognized care criteria when prescribing medications and treatments.2
Still, prior authorization has a number of critics. Patient advocacy organizations and many doctors say insurance companies overrule providers and deny needed care or medicines primarily to reduce costs — often to the detriment of patients.
In a study by the American Medical Association, 92% of physicians said that prior authorization requirements harmed patients.3 Besides overruling the patient’s doctor, the process too often involves long waiting periods that can harm the patient even if the insurer eventually approves the recommended care.
And, the insurance company could deny the treatment altogether. Your option then? Confer with your provider and if you both agree to appeal, go through an appeals process. Your chances of succeeding are roughly 50/50; one study found that 39% to 59% of appeals resulted in the insurer reversing its original coverage denial.4
If the appeal fails, you can pay for prescribed treatment in cash, which can be prohibitively expensive. Or, you may have to work with your doctor to find an alternative.5
Why do insurers reject specific drugs?
Medications that typically require prior authorization include:
- Drugs that may be unsafe when combined with other medicine;
- Lower-cost alternative medicines are available;
- Drugs that are often misused or abused, such as opioids;
- Prescription medications that are commonly used for cosmetic purposes.
Is prior authorization needed all the time?
Luckily no. If you’re facing a medical emergency and need life-saving treatment or medicine, the doctor can proceed without going through the prior authorization process. However, the care or medicine will be subject to your health plan’s emergency medical coverage,6 meaning the insurer can review the decision and rule whether or not it was medically necessary and therefore deserves coverage.
How can I find out if my treatment or drug needs prior authorization?
To find out if a specific treatment needs prior authorization, start by asking your doctor. Then double check directly with your insurer.
Checking on a prescription is even easier. Look up the drug in the insurance plan’s formulary — the plan’s approved drug list. If you find your drug, as well as the specific dose being recommended, your insurance plan covers it. In addition, the formulary will note which prescriptions need prior authorization, and which do not.7
If you’re still not sure where you stand — perhaps your doctor has prescribed a newer medication or different dosage that isn’t listed — call your insurance company and ask if it’s covered.
What should I do if a treatment or medication requires prior authorization?
If your doctor calls for a procedure or medicine that needs prior authorization, follow these steps:
- Look up the required forms: You should be able to download the necessary prior authorization forms online on your insurance company’s website.
- Work with your doctor: Your doctor is the one who has to submit the prior authorization request. Make sure you share the necessary forms with your healthcare provider.
- Double-check requirements: Once complete, go over the forms again. Is everything filled out? Is anything missing?
- Submit forms: The doctor’s office will submit the prior authorization request to your insurance company. It can take two or three days or sometimes much longer for the insurance company to reach a decision.8
Potential outcomes of prior authorization
After your doctor submits the request, the insurance company will review the documents. There are four possible outcomes:
If the insurance company finds that the recommended treatment is necessary, safe, and perhaps without a cheaper equal alternative, the company should approve its use. If that happens, you and your doctor can proceed as planned
If the insurer concludes that the procedure is not medically necessary, that the medication has a cheaper alternative, or the drug would interact negatively with your other prescriptions, the insurance company may deny the prior authorization request.
If denied by your insurer, work with your doctor to find an alternative or file an appeal. Also, you could decide to proceed with the treatment and payout of your own pocket.
Rather than a complete denial, the insurance company may require you and your doctor to first complete what’s called step therapy.
Step therapy is another process insurers use to control costs. Usually step therapy is a three-step ladder:
Step 1: You typically begin by trying a lower-cost option, like physical therapy rather than surgery, or a generic drug rather than a high cost brand name. Generics, which can be 80% to 85% cheaper than brand names and just as effective, are automatically covered, and do not require any special authorization.9
Step 2: You intensify the cheaper therapy or try another approach short of surgery, for example. With drugs, you commonly are required to turn to a preferred brand name medicine, which costs less than the brand-name.
Step 3: If the first two steps have not resolved your medical issue, you ou finally get the approval for the surgery or treatment your doctor wants. And with drugs, you finally get the non-preferred brand name medications. Keep in mind, you can only get to Step 3 if Steps 1 and 2 have proven ineffective.
If the insurance company recommends step therapy, it will outline what steps to take and how long you have to try each one before proceeding to the next.10
In some cases, the insurance company may approve a medication, but impose a quantity limit, such as only two pills a week for migraines. If your doctor feels that you need a higher dose, you will have to undergo the prior authorization process for the additional amount.
Medications that frequently have quantity limits include sleep agents, migraine drugs, and narcotic analgesics.11
If your request for a treatment or medication is denied outright by the insurance company, you can appeal the decision. To begin the process, you’ll need to send a detailed letter to the insurance company. Be sure to include your name, policy number, and the name of the policyholder on the account. Include the date of the prior authorization denial, your doctor’s name and contact information, and what treatment you were requesting.
To improve your chances, ask your medical provider to write a supporting letter detailing why the medicine or treatment is necessary. If applicable, include what other treatments have been tried in the past.
If you send your letter and supporting material through the mail, send it certified mail with a request of returned receipt. Or, you can send it online to a designated appeals email address. Within no more than seven to ten days, you should receive a confirmation that your appeal was received. If you don’t receive a confirmation, contact your insurance company to ensure they have all of the information you submitted.12
Managing the prior approval process
Prior approval takes time and adds unwanted stress onto the sick and vulnerable — and their often overworked healthcare providers . Unfortunately, there aren’t many ways around that.
To at least move things along as quickly as possible, check immediately with your insurance company to see whether any new drug or dosage or change in treatment requires prior authorization. Then, working with your doctor, collect the necessary forms and submit them as quickly as possible. If the insurer doesn’t respond within three days, stop being a patient patient. Call your insurer and press for an answer. Good luck.