News Prior Authorizations for Medications – An Overview

Prior Authorizations for Medications – An Overview


Prior Authorizations for Medications – An OverviewMany providers may have encountered the issue of prior authorization when trying to receive payments for medications prescribed. Prior authorization is an extra step required by certain insurance companies that need to review a prescribed medication. They do this to find out whether it is the right medication for the right situation. They want to make sure it is the right medication for the right situation. Thus, insurance authorization is critical for efficient billing and correct reimbursement. If physicians don’t obtain prior authorization before filing their claims, the claims may not be reimbursed or payment may be delayed.

Medications that Require Prior Authorization

Generally, the following medicines need prior approval.

  • Brand name medicines that have a generic available. A generic medicine contains the same active ingredient as that of a brand name drug while it is available at a lower cost.
  • Expensive medicines.
  • Drugs that have dangerous side effects
  • Medicines with age limits (that is certain drugs may not be covered when the patient is over a certain age). Age limit can vary according to the insurer.
  • Drugs that may be harmful when combined with other drugs.
  • Drugs used for cosmetic purposes.
  • Drugs that should be used only for certain health conditions.
  • Drugs prescribed for treating a non-life threatening medical condition.
  • Drugs that are often misused or abused.
  • Drugs not typically covered by the insurer, but said to be medically necessary by the physician.
  • Drugs that are typically covered by the insurer, but are being used at a dose higher than the normal.

Typically the pharmacist or patient lets the physician know whether the drugs prescribed require prior approval. Physicians can either prescribe another drug that does not require prior approval or go on with the pre-authorization process. However, it is better to verify the patient’s plan details to understand the conditions specified for prior approval to correctly determine whether the drugs prescribed require prior authorization.

What to Do if Medicines Require Prior Authorization?

Once it is confirmed that the medicine requires prior authorization, the physician must submit the pre-authorization letter according to the instructions specified by the insurance company. The physician should also provide some clinical information such as patient’s diagnosis or medical reason why the preferred alternative would not be appropriate for the patient. Failure to submit supplementary medical notes/documentation with the pre-authorization request form may result in delay of approval. The insurers will review the documents provided by the physician and make a decision. The physician will receive an approval letter if the insurer is convinced of the medical reason or else a denial letter with the instructions for filing an appeal.

How Insurance Verification Specialists Can be of Assistance

Physicians can get the drugs approved faster by becoming familiar with the prior authorization process. Busy physicians may not be able to handle the entire prior approval process efficiently. In such a scenario, they could consider the service of insurance verification experts who will be responsible for obtaining documentation in compliance with governmental and commercial payer requirements. Their responsibilities include:

  • Handling telephone and written inquiries from pharmacists and physicians
  • Determining whether prior authorization of medication coverage can be given after screening and reviewing requests based on benefit plan design, client specifics, and clinical criteria
  • Providing information to pharmacists and physicians regarding beneficiaries’ pharmacy benefits and drug coverage
  • Facilitating resolution of drug coverage issues
  • Maintaining accurate and complete documentation of all inquiries

Professional medical billing companies offer the service of these experts and ensure accurate insurance verification and authorization for their clients.

Prior Authorizations for Medications – An Overview
General Contributor
Janice is a writer from Chicago, IL. She created the "simple living as told by me" newsletter with more than 12,000 subscribers about Living Better and is a founder of Seekyt.

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