What is the purpose of prior authorization in health insurance?

Prior authorization is a crucial process in health insurance that serves to ensure coverage before specific medical services or medications are provided. This requirement is implemented by insurance companies to prevent unnecessary treatments and to control costs. When a healthcare provider requests prior authorization, they submit detailed information about the patient's condition and the proposed service. The insurance company then reviews this information to determine if it aligns with their coverage guidelines and medical necessity criteria.

By obtaining prior authorization, providers and patients can confirm that the insurance will cover the costs associated with the treatment, avoiding unexpected out-of-pocket expenses for the patient. This process plays a significant role in managing healthcare expenses and helps ensure that patients receive appropriate and necessary care.

The other options reflect misunderstandings about the primary function of prior authorization. While it may inadvertently influence claims processing time or paperwork, these are not its central goals. Additionally, prior authorization does not aim to increase fees charged to patients but instead works to contain costs and confirm coverage.