What does "prior authorization" indicate regarding insurance coverage?

"Prior authorization" indicates that the insurance company requires more information before providing coverage for a specific medication or service. This process often involves the healthcare provider submitting clinical information to justify the necessity of the treatment, ensuring it aligns with the insurance plan's policies. If the insurance company deems the medication or service medically necessary, they will grant authorization for coverage.

This process helps control costs and ensure that prescribed medications meet specific standards set by insurers. The other options do not reflect this process accurately; for instance, medications that are automatically covered do not require prior authorization, and the pharmacy contacting the patient or the patient paying the full price does not pertain directly to the prior authorization requirement.