Prior Authorization Resource Center
Authorization denials are among the most preventable — and most frustrating — denial types in healthcare billing. This resource covers everything from determining whether auth is required to appealing an auth denial after the fact.
Quick Answer
Prior authorization is approval from a health insurance plan required before a patient receives certain services, medications, or procedures. Without prior auth where required, claims are denied with CO-197 or CO-15. To prevent these denials, verify auth requirements on the payer's portal before rendering services and document the authorization number on the claim.
Key Takeaways
Prior auth requirements are code-specific and plan-specific — always verify.
CO-197 (authorization absent) and CO-15 (authorization invalid) are the main denial codes.
Always put the auth number on the claim (Box 23 on CMS-1500).
Retro-authorization is difficult and often denied — prevention is critical.
Auth requirements change frequently — check the current list before each service.
Step-by-Step
Check the payer's prior auth list
Search the payer's provider portal for prior authorization requirements by CPT/HCPCS code.
Verify the patient's specific plan requirements
Auth requirements vary by plan within the same payer. Confirm the patient's specific plan.
Submit the prior auth request
Submit through the payer portal, fax, or phone. Include CPT code, diagnosis, and clinical justification.
Document the authorization number
Record the auth number, approved visits/units, date range, and conditions in your practice management system.
Include the auth number on the claim
Enter the authorization number in Box 23 on the CMS-1500 to prevent CO-197 denials.
Common Mistakes
Assuming a service doesn't need auth because it didn't last year — auth lists change.
Forgetting to put the auth number on the claim — results in CO-197 denial.
Rendering the service before auth is approved — retro-auth is often denied.
Not verifying the patient's specific plan — auth requirements vary by plan.
FAQ
Related Resources
Authorization Workflow
6-Step Prior Authorization Process
Verify Requirement
Confirm whether the specific CPT/HCPCS code requires authorization for this patient's specific payer and plan type. Not all plans from the same insurer have the same auth requirements.
Gather Clinical Info
Collect diagnosis codes, procedure codes, treating provider NPI, date of service, clinical notes supporting medical necessity, and any relevant prior treatment records.
Submit Auth Request
Submit via payer portal, phone, or fax per the payer's preferred method. Include all required documentation. Incomplete requests are a primary cause of auth delays.
Document Auth Number
Record the authorization number, dates of service authorized, number of units approved, and expiration date. Document who approved, when, and through what channel.
Attach to Claim
Include the authorization number on the claim in the appropriate field (Box 23 on CMS-1500, or the equivalent electronic field). Claims submitted without the auth number are denied even if authorization was obtained.
Monitor Expiration
Authorization numbers have expiration dates. Services delivered after the expiration date are not covered by the auth. Build a process to monitor and renew auths before they expire.
Common Authorization Denial Codes
Authorization Number Not on Claim
The claim was submitted without the required authorization number in Box 23 (CMS-1500). Resolution: resubmit with the authorization number attached.
Precertification / Authorization Absent
No prior authorization was obtained before delivering the service. Resolution: request retroactive authorization with clinical documentation supporting medical necessity.
Diagnosis Not Covered
The authorization was approved for a different diagnosis than what was billed. Resolution: appeal with documentation that the billed diagnosis aligns with the approved service.
Prior Treatment Documentation Required
The payer requires documentation of prior conservative treatment before approving the requested service. Resolution: provide records of prior treatments tried and failed.
Frequently Asked Questions
Prior Authorization Resource Center FAQ
What is prior authorization in healthcare?
Prior authorization (also called pre-authorization, prior approval, or pre-cert) is a payer requirement that providers obtain approval before delivering certain services, procedures, or medications. The payer reviews the proposed service against clinical criteria to determine whether it is medically necessary and covered under the patient's benefit plan. If approved, the payer issues an authorization number that must accompany the claim submission.
What services typically require prior authorization?
Services most commonly requiring authorization include: inpatient hospital admissions, outpatient surgery, advanced imaging (MRI, CT, PET), specialty pharmacy and biologics, physical and occupational therapy (after a set number of visits), behavioral health services, home health and DME, specialty consultations, and interventional procedures. Requirements vary significantly by payer, plan type, and state.
What happens if a claim is denied for missing authorization?
A missing authorization denial (typically CO-15 with RARC MA130, or CO-197) means the claim was submitted without a required authorization number. If the service hasn't been delivered yet, obtain the authorization before proceeding. If the service was already delivered, request a retrospective authorization — some payers will grant these for urgent or emergent situations. If a retro auth is denied, a clinical appeal citing medical necessity may recover the claim.
What is the difference between authorization and a referral?
An authorization is a payer approval for a specific service, procedure, or admission — required before billing. A referral is a physician's recommendation directing a patient to a specialist or other provider — often required within HMO plans. Some plans require both an authorization from the payer AND a referral from the primary care physician for specialist services.
How long does prior authorization take?
Standard (routine) authorization requests typically receive a decision within 2–5 business days. Urgent authorization requests must receive decisions within 72 hours under federal law for commercial plans, and within 24 hours for Medicare Advantage. Emergency authorization is generally not required in emergent or urgent situations.