What is a Prior Authorization?
A prior-authorization (PA) is a process used by health insurance plans to decide if they will cover a medical service, device or treatment. It is sometimes called an “authorization request” or “prior approval”. In most cases, health plans and Medicaid approve PA requests based on their decision that the treatment or service is medically necessary.
Who is Responsible for Completing a Prior Authorization?
In most cases the provider supplying the service or equipment (for example, the medical equipment vendor or therapist) is responsible for filling out the PA paperwork.
How Do I Know if a PA is Needed and When a New One is Required?
Medicaid or a health plan will let the provider know when or if a PA is needed and when it needs to be renewed. For example, the health plan may approve five therapy visits and require that a new PA be submitted before more visits are approved.
Who Makes the Decision to Approve or Deny the Prior Authorization?
For Wisconsin Medicaid, designated staff members at the state Department of Health Services approve or deny PA requests. Most HMOs and other health insurance plans also have designated staff members who review all PA requests. If the reviewers have questions about whether the service is medically necessary, they may send the PA back and ask for more information or documentation.
Can Families Influence the Prior Authorization Process?
Yes! Families can to be actively involved in the development of the prior authorization. This can help ensure that the PA will include all relevant information and will provide a complete picture of why the service or treatment is needed. Families can:
- Offer to review the PA for accuracy
- Offer to provide additional documents or background information
- Get letters from other providers or support people who work with the child
What Do Medicaid and other Health Plans Consider with a PA?
Reviewers will consider the following:
- If an item or service is medically necessary and appropriate
- How much it will cost
- Whether it is likely to be effective, of high quality and prescribed at the right time for the child
- Whether there is a less expensive or more appropriate alternative
- Whether the provider or recipient has overused or misused services
What are Some Reasons why a PA is Denied?
A health plan may deny a PA request if the provider did not document medical necessity. In addition, some providers are not familiar with submitting PA requests and the PA is submitted without all the necessary information. In rare cases, providers may tell you something is not covered if they don’t want to submit a PA or if the first PA was denied.
Sometimes providers use certain terms when they complete a PA. Without knowing it, they might use the same terms the school used in the IEP and it looks like Medicaid is paying for something twice so they deny the PA due to Duplication of Services.
What does “Duplication of Services” Mean?
When reviewing a PA, a health plan or Medicaid will likely request a copy of your child’s IEP to see if your child is already receiving the same therapy or services being requested. Wisconsin Medicaid will not cover a service that is already being provided at school or should be provided at school. This is especially true because often the school bills Medicaid for the services at school as well!
If the PA is for therapy services, a family can work with the provider to make sure the therapy goals are related to functioning at home and in the community and not education related. To learn more, see our resource called “school-based and community-based therapy services” in our “Did You Know? Now You Know!” training.