A health plan's precertification (or prior authorization) process usually begins with a nurse employed by the health plan completing an initial review of the patient's clinical information, which is submitted by the practice, to make sure the requested service meets established guidelines. If it does, the nurse authorizes the request and the health plan will cover the service. If the service does not meet the guidelines, the nurse refers the case to the health plan's physician reviewer (usually the medical director or a physician consultant), who decides whether to approve or deny the request based on the information provided to the health plan. The physician reviewer may also "pend" the request and ask the physician for additional information before making a final decision.
The precertification process is one of the reasons physicians and patients are so dissatisfied with HMOs, which use this strategy more often than other managed care organizations in an effort to contain costs. The trade-off is that HMO premiums are usually lower than those of other managed care organizations that offer fewer restrictions (e.g., PPOs and POS plans). Although many health plans are finding less punitive ways to cut costs, such as using care coordination, some form of utilization management will always be used because it encourages both patients and physicians to make cost-effective decisions and abide by the plan's rules.
OTHER USES -- "Precertification is a process still used by health insurance companies to control health care costs. Although we believe precertification is unnecessary and not cost-effective, in those instances where precertification is still being utilized, we suggest that the following procedures be adopted. This statement suggests guidelines that should help achieve this goal while allowing optimal access to care for children.
The precertification process is a utilization management tool used to control hospital admissions, utilization of services, and medical facility expense. This "tool" must be used uniformly with care, concern, and compassion and with a clear objective that its use does not prevent care needed by pediatric patients.
More Examples of Pre-Certification:
Precertification is the process of confirming eligibility and collecting information prior to inpatient admissions.
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