What Purpose Does a Precertification Number Serve?

Precertification is a mandatory step for many health insurance plans. This process helps determine if certain medical services or procedures will be covered under a patient’s policy. Understanding this requirement helps patients navigate their healthcare benefits. This article explains the function and importance of precertification numbers in ensuring appropriate and covered medical care.

What Precertification Means

A precertification number is an authorization code issued by a health insurance company. This number signifies the insurer’s approval for a proposed medical service or treatment before it is performed. It confirms that the insurance company has reviewed the service and, based on their criteria, deems it medically necessary and eligible for coverage under the patient’s specific policy terms.

This authorization is also widely known by other terms, such as “prior authorization,” “pre-approval,” or “pre-service review.” While a precertification number indicates likely coverage, it does not guarantee payment. Instead, it confirms medical necessity and coverage eligibility at the time of approval.

The Core Purpose of Precertification

Insurance companies primarily require precertification to ensure that proposed treatments or services are genuinely needed. This process helps insurers verify that a medical intervention is appropriate for a patient’s condition, thereby aiming to prevent unnecessary procedures. It also serves as a mechanism for insurance companies to manage healthcare costs effectively. By reviewing planned services in advance, insurers can avoid covering expensive, unproven, or elective procedures that may not be clinically appropriate.

Precertification also guides patients and providers toward the most effective and cost-efficient treatment options, aligning with established medical guidelines. The process plays a role in preventing potential fraud and abuse within the healthcare system. It can help identify and prevent billing for services that are not rendered or are medically unjustified. Ultimately, precertification confirms that the specific service falls within the patient’s insurance policy benefits and limitations, ensuring alignment between recommended care and coverage.

Services Typically Requiring Precertification

Many medical services, procedures, and treatments commonly require precertification. These often include more complex or higher-cost interventions. Examples include elective surgeries, such as knee replacements or bariatric procedures. Inpatient hospital stays, whether planned or following an emergency, typically necessitate precertification.

Advanced imaging techniques like MRI, CT, and PET scans also commonly require prior approval. High-cost medications, particularly specialty drugs, usually fall under precertification rules. Other services that often require this authorization include those provided by out-of-network providers, durable medical equipment (DME), and certain mental health treatments or substance abuse programs. Home healthcare or skilled nursing facility stays may also require precertification, though requirements vary by plan.

The Precertification Process

The process of obtaining a precertification number typically begins with the healthcare provider. The healthcare provider, such as a doctor or hospital, usually initiates the request on behalf of the patient. The provider then submits comprehensive information to the insurer, including patient details, the diagnosis, the proposed treatment plan, and relevant medical history. Supporting clinical documentation, like test results or clinical notes, is also provided to substantiate medical necessity.

Upon receiving the information, the insurance company’s medical staff, which may include nurses or doctors, reviews the submitted details. They assess the request against their established medical necessity criteria and the patient’s specific policy guidelines. Following this review, the insurer will issue a decision: an approval, a denial, or a request for more information. If approved, a precertification number is provided; if denied, the insurer must provide a reason and inform the patient of their appeal rights. Response times for precertification requests can vary, with routine requests often processed within 2 to 5 business days, while urgent requests may be handled within 24 to 72 hours.

Consequences of Not Obtaining Precertification

Failing to obtain a required precertification number before a medical service is rendered can lead to significant financial and administrative repercussions. The primary consequence is that the insurance company may refuse to pay for the service altogether. This leaves the patient responsible for the full cost of the treatment, which can amount to substantial unexpected expenses.

Even if some coverage is eventually granted, the patient’s out-of-pocket costs, such as deductibles, co-pays, or co-insurance, may be considerably higher than if precertification had been secured. Both the patient and the provider may face a substantial administrative burden attempting to appeal a denial or retroactively obtain approval, a process that is often challenging and time-consuming. In some instances, a healthcare provider might decline to perform a service without prior authorization, leading to delays in receiving necessary medical care. While providers typically handle the precertification process, it remains the patient’s responsibility to understand their insurance policy and ensure that precertification is obtained when required.