What is the purpose of preauthorization in health care?

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Preauthorization is a payer-required step before delivering certain services to verify that the service will be covered and medically appropriate. The insurer reviews the proposed treatment, the patient’s diagnosis, and supporting documentation to decide if the service fits the coverage and medical-necessity criteria. This helps control costs, prevents payment for unnecessary or non-covered procedures, and ensures high-cost or collaboration-critical services meet evidence-based standards before they’re performed. It’s not patient consent to treatment, which is about agreeing to proceed regardless of coverage, and it’s not a scheduling approval by a physician or a post-service billing adjustment, both of which occur after the service is planned or delivered. In short, preauthorization is the insurer’s approval obtained before service to confirm coverage and appropriate use.