Preauthorization (Prior Authorization)
Requirement that the plan approve specified services (surgery, imaging, admission) before delivery, or coverage is reduced or denied.
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Practice This Concept
Which managed care technique controls health care costs by evaluating the medical necessity of planned services before they are provided?
Utilization review, which may require preauthorization or precertification of non-emergency care — Managed care plans use utilization review (UR) to determine whether proposed treatment is medically necessary, appropriate, and cost-effective before, during, or after care is delivered. In its prospective form, UR requires preauthorization or precertification before a non-emergency admission or procedure; concurrent and retrospective reviews take place while treatment is ongoing or after it has concluded. By denying or limiting care that fails medical-necessity standards, UR controls utilization and holds premium levels down. This tool is a defining cost-containment mechanism of HMOs, PPOs, and EPOs, and it is a standard exam point under managed care delivery systems.
National insurance concept
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