Insight
Prior authorization is a payer requirement to approve a service before it is delivered. It is the most preventable category of denial and among the least recoverable, because a missing authorization generally cannot be obtained retroactively — the service has already happened and the approval window has closed. Denials arrive as CO-197. The requirement is set per plan rather than per payer, which is the detail that catches practices out: two patients with the same insurance carrier can have different authorization requirements because they hold different plans.
By the time a CO-197 denial reaches the billing office, the service has been delivered and the opportunity to obtain authorization has passed. There is nothing for a biller to fix. This makes prior authorization structurally different from most denial categories: it cannot be worked, only prevented. The prevention happens at scheduling and eligibility verification, days or weeks earlier, which means a practice trying to solve an authorization problem by pushing harder on denial follow-up is working at entirely the wrong end of the process.
Practices build mental rules — this payer requires authorization for that procedure — and those rules are unreliable because the requirement attaches to the benefit plan rather than the carrier. An employer-sponsored plan and a marketplace plan from the same carrier can differ. Medicare Advantage plans frequently impose authorization requirements that traditional Medicare does not, while presenting a card that looks broadly familiar at the front desk. The only dependable method is verifying the requirement against the specific plan for the specific service, each time, rather than relying on carrier-level habit.
An approved authorization confirms that the payer considers the service medically necessary under the plan. It does not confirm that the patient was eligible on the date of service, that benefits had not been exhausted, that the deductible position makes the claim payable, or that the service delivered matched the service authorized. Authorizations are also bounded — they carry a validity window and often an approved number of units or visits. A course of therapy that runs past its approved visit count begins generating denials mid-course, and the denials look like an authorization failure when the authorization was obtained correctly and simply ran out.
Check the requirement at the point of scheduling, against the plan, for the specific procedure code. Submit with the clinical documentation supporting medical necessity, because thin submissions generate requests for information that consume the lead time. Record the authorization number, the validity window, the approved units and the exact codes approved — then verify at check-in that the service about to be delivered still falls inside all four. Where a requirement cannot be met before the service, that is a decision for the practice to make knowingly, with the patient informed, rather than one discovered on a remittance advice weeks later.
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FAQ
Rarely, and it should not be planned for. Some payers permit retroactive review in narrow circumstances such as emergent care, but the general position is that authorization must precede the service. A CO-197 denial is usually a write-off.
No. It confirms medical necessity under the plan. Payment still depends on eligibility on the date of service, remaining benefits, deductible position, and whether the service delivered matched what was authorized.
It works best owned at scheduling or front office, because that is where the lead time exists. Placing it in billing means the requirement is discovered after the service, which is exactly when nothing can be done about it.
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