Question

Read the following preauthorization policy from a typical PPO

plan and answer the questions that follow:

Preauthorization is the process of collecting information prior to
inpatient admissions and se

Answer 1

Preauthorization is a process by health insurance providers, especially PPO plans, to approve a medical service before it is provided. It confirms coverage and necessity. Obtaining preauthorization is key for patients to ensure their services are covered by the insurance.

Step-by-step explanation:

The term preauthorization refers to the process used by a Preferred Provider Organization (PPO) plan to evaluate a proposed medical service, such as an inpatient admission or a series of treatments, before the service is provided. This process ensures that the proposed service is covered under the plan's benefits and is medically necessary. The healthcare provider typically submits a request for preauthorization, which includes relevant medical information and a justification for the service.

For patients, it's essential to understand that obtaining preauthorization can be crucial for ensuring that the costs of the healthcare service will be covered by the insurance plan. Failing to get a preauthorization when required can lead to higher out-of-pocket expenses or a denial of coverage for the service. Insurers may use preauthorization as a cost-control measure to prevent unnecessary or overly costly services from being performed.