What does 'prior authorization' refer to in healthcare?

Prior authorization in healthcare refers to a prerequisite that must be met before a patient can receive certain medical services or medications. This process is typically employed by insurance companies to control costs and ensure that the proposed services or treatments are medically necessary and appropriate for the patient's condition. By requiring prior authorization, insurers can assess the necessity of specific treatments before they are administered. This helps to prevent unnecessary procedures and medications, ensuring that patients receive care that is both effective and justified according to clinical guidelines.

The focus of prior authorization is on the need for approval before any scheduled treatment, making it an essential component in managing healthcare costs and optimizing patient care. It supports the insurer's effort to coordinate and manage healthcare services effectively, ensuring patients receive appropriate care while also containing unnecessary spending.