What does the term "prior authorization" refer to in health insurance?

The term "prior authorization" refers specifically to a requirement mandated by health insurance plans that necessitates obtaining approval from the insurance provider before certain services or procedures are performed. This process is designed to ensure that the proposed treatment is medically necessary and meets the insurance company's criteria for coverage. By requiring prior authorization, insurance companies can manage costs and ensure that patients receive appropriate care.

This process is crucial for both the healthcare provider and the patient. For providers, it ensures they have the necessary approvals in place to avoid denial of claims after services are rendered. For patients, it helps prevent unexpected expenses related to treatments that may not be covered under their insurance plan.

The other options do not accurately describe prior authorization. For instance, the billing process discussed in one option occurs after services have been provided, which is contrary to the concept of prior approval. Another option mentions insurance coverage as a general type, which does not specifically address the procedure of obtaining clearance before treatment. Lastly, patient registration pertains to the administrative process of gathering patient information and does not relate to the requirement of approval for services.