April 4, 2013

Health Care Prior Authorization: Be Prepared, Be Proactive

Have you ever needed an MRI or PET scan and been required to obtain prior authorization? Have you ever wondered why? Or have you ever been denied by your health insurance company for a service such as an MRI or PET scan or a prescription?

Our Employee Benefits team hears these questions on a regular basis as we help make sure health insurance members are fully utilizing their plans and I’m going to try to help clear up the confusion and hopefully prevent any inconveniences related to prior authorization for you in the future.

What is Health Care Prior Authorization?

Prior authorization is often required by insurance companies for services such as MRIs, PET scans and many prescription medications. When a prior authorization is requested it means that the insurance carrier needs more information before making a final decision on whether it will be covered. For MRIs and PET scans, the insurance company will often have a third party vendor that your doctor will have to work with to ensure that the scan, procedure or medication is necessary and the best course of action at this time. It will be the responsibility of your doctor to obtain a prior authorization however if your doctor does not provide the information requested by the insurance company, you may become responsible for the entire cost of the service or medication.

What is the Purpose of Prior Authorization?

The main reason for prior authorization is to help control costs and prevent medical professionals from over prescribing. Ultimately, the goal is to try to save you, the member, and your company, from continuously increasing costs in your health insurance every year. Due to the high costs of these services, prior authorization attempts to manage the overuse of these services.

For example, MRI/CT scans may be denied because the request was incomplete and additional medical records are needed before a decision is made.  They are also often denied because the medical records indicate that a x-ray may be all that is needed.  The insurance company may request that a member try Physical Therapy before approving an MRI.  We have also found that there are some doctors who will simply recommend an MRI for any ache or pain even though there may be a better test option available.

What if You’re Denied Prior Authorization?

If you are denied by your insurance company, your doctor’s office will receive a fax with the reason the claim was denied and the information that will be needed in order for it to be reconsidered. You will also receive a letter in the mail making you aware. To help speed up the process by minimizing the back-and-forth between your insurance carrier and your doctor’s office, your physician should request a peer-to-peer review verses the standard paperwork. This is because it provides an over the phone meeting with a medical professional.  It is important to realize that your doctor’s office plays a significant role in whether or not the prior authorization is accepted, not just the insurance company.

As a health insurance member, you can be proactive with your doctor. Make sure to check with your company’s Human Resources Director to determine whether a prior authorization is needed for your insurance carrier and then relay this to your physician.

FAQ: Prior Authorization and Insurance Coverage

Q: How can I find out if a service needs prior authorization?
A: The best first step is to review your health plan documents or contact your insurance provider directly. You can also speak with your company’s Human Resources Director or your Employee Benefits Consultant, who can help you determine if prior authorization is needed for specific services.

Q: Who is responsible for getting the prior authorization?
A: Your doctor is typically responsible for initiating and completing the prior authorization process with your insurance provider. However, staying informed and proactive can help avoid delays—especially by confirming the need for prior authorization early in the process.

Q: What should I do if I receive a denial letter?
A: Don’t panic. Review the letter carefully—it should explain why the request was denied and what additional information may be needed. Share this with your doctor and request that they pursue a peer-to-peer review, which may accelerate the reconsideration process.

Q: Can PSA help if I’m stuck in the prior authorization process?
A: Yes. Our Employee Benefits team is here to support you. We regularly help employees and their families navigate insurance issues, including denials, delays, or unclear requirements.

Contact Us

Still have questions or concerns about prior authorization? Our Employee Benefits team is here to help you navigate the process and ensure you’re getting the most out of your health plan. If you or your physician are facing difficulties with insurance approvals, we can help identify the issue and work toward a solution.
Please reach out to your Employee Benefits Consultant directly, or contact me at alevey@psafinancial.com for personalized assistance. You can also fill out our quick online contact form and a representative will reach out to you as soon as possible.