What does preauthorization in healthcare refer to?

Preauthorization in healthcare specifically refers to the process by which a healthcare provider obtains approval from a patient's insurance company before certain medical services or procedures are performed. This ensures that the services are covered under the patient's insurance plan. By obtaining preauthorization, the provider and patient are aware of the benefits that will be covered, thus avoiding unexpected costs and ensuring that the treatment aligns with the insurance policy’s guidelines.

This process is crucial for non-emergency procedures or more expensive treatments, as it helps in verifying coverage and preventing denial of payment after services are rendered. Understanding what is covered under a patient's insurance policy is essential for both the healthcare provider and the patient, as it impacts care decisions and financial planning.