What is Prior Authorization in Medical Billing?

In today’s complex healthcare landscape, there are certain medications and procedures that need an extra step. This is called pre-authorization. But what is pre-authorization, and why do certain medical procedures and medications need it? In this article, we will cover the ins and outs of prior authorization and why it is important in healthcare.   

What is Prior Authorization?

Prior authorization is defined by healthcare.gov as 

 “Approval from a health plan that may be required before you get a service or fill a prescription in order for the service or prescription to be covered by your plan.” 

Insurance agencies use prior authorization (precertification, prior approval, predetermination, etc.) to check if a service or product is covered and whether it will be paid in part or full. Prior authorization is usually obtained before certain procedures or medications are given to a patient. Prior authorization often deprives people of the required service, delaying the process. Providers need prior authorization to get the patient’s health insurance approval before the company covers the service cost. 

Medical Treatments and Medications that need Prior Authorization 

Providers do not require prior authorization for urgent care or emergency services, as it can delay treatment. Certain medications and procedures require prior authorization, including: 

  • Medications that carry a risk of addiction or illegal use 
  • Drugs for cosmetic use 
  • Medication or drugs that are high-risk 
  • Diagnostic imaging 
  • Healthcare services for home 
  • Rehabilitation 
  • Surgery that is not an emergency 
  • Medical equipment 

Importance of Prior Authorization in Medical Billing 

Enhancing prior authorization is important in healthcare as it helps providers validate the need for certain medical procedures and medications ahead of time. It also helps reduce costs and helps providers avoid overprescribing. When providers pre-authorize medical procedures and medications, it helps them make sure that the service is even needed or not and prevents them from getting duplicate services from different providers if they consult a different specialist. 

How to Improve your Prior Authorization Process 


Keeping proper documentation will go a long way. It will help not only in prior authorization but also medical billing and coding processes. It is advisable to submit a complete request along with proper documentation. In prior authorization, if you have incomplete or poor documentation, it will end up getting your PA rejected. 

Automating the Prior Authorization Process 

Prior authorization can be a lengthy task. When done manually, it can take days or even weeks. This is why providers should automate the prior authorization process to speed up everything. Automated authorization is done electronically, directly from the payer and provider. In order to further accelerate the prior authorization process, it is recommended to use automated prior authorization. It allows healthcare providers, payers, manufacturers, and pharmacies to access and share information through a comprehensive platform, thus expediting the prior authorization process and improving turnaround times. 

Reducing Services Requiring Prior Authorization 

One good way to expedite your prior authorization process is by reducing the services that require prior authorization. To improve your PA process’s turnaround time, ensure you and your staff check prior authorization requirements before providing any service or sending any prescriptions to a pharmacy. You must also pre-define a process that checks for proper documentation that is required for prior authorization in case a procedure or medication needs it.   

Create a List  

Creating a comprehensive list of the medical procedures and medications that need prior authorization is a smart way to improve your prior authorization process. You can do this by referring to your largest payers for copies of their PA guidelines or checking your electronic health record for prescription drug tiers requiring prior authorization.  

Leave it in the Hands of Professionals 

The best and most efficient way to ensure your prior authorization process is fast and efficient is by leaving it in the hands of professionals. Instead of assigning this complex task to inexperienced staff, you should leverage the expertise of a skilled team of prior authorization specialists. It helps expedite your prior authorization process and frees up your time so you can focus on doing what you do best: delivering exceptional care. 


Prior authorization can be a complicated additional step in medical billing. However, it does not have to be so stressful. Outsourcing your prior authorization process to experts will give you peace of mind and a streamlined prior authorization process. 

CareCloud’s comprehensive range of medical billing services helps providers streamline all aspects of their medical billing. Our services help you maximize your revenue and improve clinical operations. Contact CareCloud today to leverage the latest technology and remove the stress of prior authorization. 

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