What Is Pre-Authorization/Pre-Approval For Group Health Insurance?

A group health insurance acts as a safety net during medical emergencies. It saves you from the strenuous costs associated with medical treatments. You just need to file the claim with the insurance company, and that is it! Seems simple enough, right? Well, unfortunately, it is not that simple. Multiple factors revolve around the claim process, one of which is pre-authorization or pre-approval. It is vital to understand these terms as they can be the reason for that your claim under the group policy is rejected.🤒

What is Pre-Authorisation?

Specific medical treatments and prescriptions require prior approval of the insurance company before they can be covered under the insurance claim. This is known as pre-authorization or pre-approval. In case of the non-receipt of pre-authorization or pre-approval, the expenses associated with the non-approved treatment or prescription will not be reimbursed by the insurance company.

When Does Pre-Authorisation Become Necessary?

The insurance company can necessitate the pre-authorization in the following cases:

• When the insurance company wants to make sure that the drug or medication is essential to treat the medical condition, primarily cosmetic medications 💊
  Often, cosmetic drugs are disallowed as per the terms of the policy. Therefore, the insurance company needs to know if the drug prescribed operates as a medical or cosmetic drug.
• Whether the prescribed medication or drug aligns with the latest medical practices and will not interact or interfere negatively with other medical treatments you may be receiving, certain medications can prove unsafe when administered with other medicines and treatments.
• The prescribed medication or drug is the most economical resource available for your medical treatment💰
  For example, you are prescribed Drug-A for your medical treatment; however, there is an alternative, cheaper Drug-B available that works at par with Drug-A when treating the specified disease. In this case, the insurance company may disapprove the claim reimbursement for Drug-A, citing that a cheaper alternative is available that works at par with it.
• To avoid duplication of the same process. This is a point of concern for many insurance providers. For instance, the doctor may prescribe an X-Ray even though the X-Ray was taken just a week ago. The insurance company may question the need for the subsequent X-Ray within such a short period and disallow the same in case it feels unnecessary.
• Whether the treatment is working and treating you? Suppose you were prescribed a specific therapy for two months, after which the therapy duration was extended by another two months. In that case, it may raise the question of whether the therapy is working or there needs to be a treatment change. This can lead to disallowance if the therapy does not serve the purpose.
• Whether a drug is not misused or abused to treat a specific condition, this becomes important because the medication prescribed may not be necessary for treating the patient’s medical condition, rendering the drug ineffective and merely an unnecessary expense.

Pre-Authorisation For Planned Hospitalisation

If you have planned hospitalisation and will undertake treatment with a network hospital, you can contact the insurance company and fill up the pre-authorisation form. Often, hospitals themselves handle formalities relating to form filling. The application should be supported by the cost estimate of the treatment, medical diagnosis (if required), and any other information that the insurer may ask. The insurer will verify the submissions and provide authorisation in case of satisfactory evidence.

Post authorisation, you need not pay for the treatment. Further, the network hospital will send all the documents, prescriptions, reports, and bills directly to the insurance company📝

However, the hospital may ask for an initial deposit even though the insurer has provided authorisation. This is refundable after the insurer provides the final claim approval to the hospital.

There might arise a situation where the insurer provides pre-authorisation when applied for but withdraws it before the patient’s discharge. While this seldom happens, they may appear in cases where the insurer is not satisfied with the diagnosis and treatment and feels that it is inconsistent with the agreed pre-authorisation. In such cases, you might end up paying for the medical treatment. However, you can still apply for reimbursement from the insurance company in the same way as a non-cashless/reimbursement claim.

What Does Plum Offer?

Plum is one of the dominant group health insurance providers. By understanding the needs of employers and employees, we customise corporate health plans to suit the organisation’s needs and provide the best coverage to its employees. Parting ways with the traditional tedious claim filing process, Plum has made claim filing convenient by allowing employees to file a claim simply by using WhatsApp, where you can find access to policy details and health cards. Admin and employee dashboards ensure that employers and employees can conveniently avail of group insurance benefits. Are you Plum insured? If not, then it’s high time you take the leap and get group insurance for your organisation!🧑🏻‍🤝‍🧑🏻