An insurer's approval before a service is called.

• A. Preauthorization
• B. Prepaid Plan
• C. Managed Care
• D. Primary Care Provider

Answer: (A)

The main idea here is obtaining approval from the insurer before a service is provided, to confirm that the service will be covered. This is called preauthorization (often also referred to as prior authorization). Many health plans require this step to verify that the service is medically necessary and appropriate for the patient, and to authorize payment in advance. Usually a clinician or facility submits a request with patient details, the proposed service, CPT/HCPCS codes, and supporting medical documentation. The insurer reviews the submission and then responds with an approval, an approval with conditions, or a denial. If approval isn’t given, the patient may incur the full cost or face partial or no coverage. This concept is distinct from a prepaid plan, which relates to paying for care in advance, and from managed care, which is a broader system for coordinating care, rather than the specific pre-service approval process. It also differs from the role of a primary care provider, who coordinates a patient’s overall care rather than handling insurer approvals.