Precertification vs Preauthorization

The healthcare industry is constantly changing, which can make it difficult to keep up with the latest terminology. Some terms that seem to cause confusion among providers and payers alike are precertification and preauthorization. It's not hard to see why — these two terms are often used interchangeably in conversations about healthcare administration, but there are differences between them. This post will explore what those differences are and how they affect your business as a provider or payer for patients' services.

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What is Precertification?

Precertification is the process of obtaining approval from a healthcare payer in advance for services that will be provided to a patient. The goal of precertification is to ensure that patients receive only necessary and appropriate services and that those services are covered by the patient's insurance plan.

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What is Preauthorization?

Preauthorization, on the other hand, is the process of obtaining approval from a healthcare payer for services that have already been provided to a patient. This typically happens when there is a question about whether or not the services will be covered by the patient's insurance plan. Preauthorization can also be used as a way to confirm that the services the provider is billing for are actually covered by the patient's plan.

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Patient Detail Verification

One important distinction between precertification and preauthorization is that precertification is always required for services that are considered to be outpatient, while preauthorization is not always necessary. This includes services like laboratory tests and radiology procedures, which are typically performed in a healthcare facility's outpatient setting.

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Authorization Follow Up

If a healthcare payer denies precertification, the healthcare provider can appeal that decision. However, providers must follow up on preauthorization requests as quickly as possible and submit them to the healthcare payer within 72 hours of providing services. If they don't do this, it could potentially invalidate their claim altogether.

Precertification and preauthorization are two important processes in healthcare administration. It's important to understand the differences between them so that you can make sure your business is operating as smoothly as possible and, as a patient, that you understand more about the services you buy into. If you have any questions about precertification or preauthorization, please don't hesitate to reach out to AuthNet for help.

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