Prior Authorization (PA)
Prior authorization is a requirement by a health insurance plan that a prescriber obtain approval before a specific medication, procedure, or service will be covered, used to ensure medical necessity and manage costs.
Exam Tip
PA rejection code = 75. Technicians identify the rejection and notify the pharmacist; the prescriber submits the PA request to insurance. Know the PA workflow for the ExCPT.
What Is Prior Authorization?
Prior authorization (PA), also called precertification or prior approval, is a cost-management tool used by insurance companies and PBMs (pharmacy benefit managers) to require approval before certain medications are dispensed. If a prescription requires PA and it has not been obtained, the insurance claim will be rejected.
How the PA Process Works
| Step | Who | Action |
|---|---|---|
| 1 | Pharmacy technician | Processes claim; receives PA-required rejection |
| 2 | Pharmacy technician | Notifies pharmacist of the rejection |
| 3 | Pharmacist | Contacts prescriber about the PA requirement |
| 4 | Prescriber's office | Submits PA request to insurance with clinical justification |
| 5 | Insurance/PBM | Reviews and approves or denies the request |
| 6 | Pharmacy | Reprocesses claim after PA approval |
Common Reasons PA Is Required
| Reason | Example |
|---|---|
| Non-formulary drug | Drug is not on the plan's approved list |
| Brand when generic available | Prescriber requests brand-name version |
| High-cost medication | Specialty or biologic drugs |
| Step therapy | Must try a cheaper drug first |
| Quantity limits exceeded | Prescription exceeds plan's quantity limits |
| Age/gender restrictions | Drug not typically used for patient's demographic |
| Off-label use | Drug used for non-FDA-approved indication |
PA vs. Other Insurance Tools
| Tool | Description |
|---|---|
| Prior Authorization | Must get approval BEFORE dispensing |
| Step Therapy | Must try preferred drug first; if it fails, PA granted for non-preferred |
| Quantity Limits | Maximum amount per fill or time period |
| Formulary Exception | Request to cover a non-formulary drug |
Pharmacy Technician's Role
- Identify PA rejection codes during claim processing (code 75)
- Notify the pharmacist immediately
- Communicate with the prescriber's office about PA requirements
- Help gather documentation needed for the PA request
- Follow up on pending PA requests
- Reprocess claims once PA is approved
Exam Alert
Prior authorization is tested in the Dispensing Process domain (55% of ExCPT). Know rejection code 75 (PA required), the workflow for handling PA rejections, and the technician's role in facilitating the PA process.
Study This Term In
Related Terms
Formulary
A formulary is a list of prescription drugs approved for coverage by a health insurance plan, pharmacy benefit manager (PBM), or healthcare institution, organized into tiers that determine patient cost-sharing.
Adjudication (Pharmacy)
Adjudication is the real-time electronic process by which a pharmacy submits a prescription claim to a patient's insurance plan and receives an immediate approval, rejection, or request for additional information.
Drug Utilization Review (DUR)
Drug utilization review (DUR) is a systematic process of evaluating prescription drug use to ensure medications are used appropriately, safely, and effectively, as mandated by OBRA-90 for Medicaid patients.
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