Precertification vs. Preauthorization: What Healthcare Executives Need to Know

In today’s complex healthcare landscape, understanding the nuances between precertification and reauthorization (prior authorization) is crucial for healthcare executives aiming to optimize administrative processes, reduce claim denials, and enhance patient satisfaction.

What Is Precertification?

Precertification is when a healthcare provider must obtain approval from a health insurance company before delivering a specific service. This step ensures that the proposed service is covered under the patient’s health plan. It primarily verifies coverage, not necessarily an assessment of medical necessity.

• Focus: Verification of insurance coverage
• Timing: Before scheduling or delivering the service
• Initiated by: Typically, the provider on behalf of the patient
• Common examples: Hospital admissions, advanced imaging procedures like MRI or CT scans

What Is Preauthorization?

Preauthorization, also known as prior authorization, involves obtaining formal approval from the payer to confirm that a service is medically necessary and appropriate. Without this approval, reimbursement may be denied, even if the service is covered under the plan.

• Focus: Assessment of medical necessity
• Timing: Before treatment or service delivery
• Initiated by: Usually the provider, sometimes in coordination with care managers
• Common examples: High-cost medications, elective surgeries, specialty treatments

Why the Difference Matters

Confusing precertification with preauthorization can lead to costly claim denials and patient dissatisfaction. While precertification verifies policy coverage, preauthorization assesses clinical justification. Properly distinguishing and managing both processes is essential for compliance, timely reimbursement, and uninterrupted patient care.

How NYX Health Helps

At NYX Health, we specialize in prior authorization and utilization management solutions that streamline both precertification and preauthorization workflows. Our technology-enabled services assist healthcare providers in reducing administrative burdens and improving financial performance.

• Real-time benefit checks
• Automated authorization tracking
• Clinical criteria matching for faster payer approvals
• Denial prevention analytics

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Want to simplify your precert and prior auth processes?
Contact NYX Health to learn how our team can optimize your revenue cycle from day one.

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References:

1. Mayo Clinic. Insurance approvals: pre-certification and prior authorizations. https://www.mayoclinic.org/billing-insurance/insurance/insurance-approvals
2. Harvard Health Publishing. Prior authorization: What is it, when might you need it, and how do you get it? https://www.health.harvard.edu/staying-healthy/prior-authorization-what-is-it-when-might-you-need-it-and-how-do-you-get-it
3. American Medical Association. Prior authorization practice resources. https://www.ama-assn.org/practice-management/prior-authorization/prior-authorization-practice-resources
4. Verywell Health. Prior Authorization: Overview, Purpose, Process. https://www.verywellhealth.com/prior-authorization-1738770
5. Bedsiide. What Are the Differences Between Pre-Authorization and Pre-Certification? https://bedsiide.com/what-are-the-differences-between-pre-authorization-pre-certification/