In the context of medical expense insurance, what is precertification (preauthorization) and its purpose?

• A. A requirement for new subscribers.
• B. A review after service to determine payment.
• C. A review by the insurer before certain services or admissions to confirm coverage and necessity.
• D. A method to set premiums.

Answer: (C)

Precertification, also called preauthorization, is a review done by the insurer before a planned medical service or hospital admission. Its purpose is to confirm that the proposed service is medically necessary and covered under the patient’s policy, and to authorize payment if those criteria are met. This upfront check helps prevent paying for services that aren’t covered or aren’t medically needed and guides both the provider and patient toward approved options. It isn’t a post-service claims review, and it isn’t used to set premiums. Many plans require precertification for inpatient admissions, surgeries, certain imaging tests, and other high-cost or specialized services.