A prospective review in healthcare is a process used by insurance companies to determine if a proposed medical service is medically necessary and appropriate before it is performed. This check, often called prior authorization, pre-certification, or pre-approval, is a formal requirement for coverage of certain procedures, medications, or equipment. The primary goal is for the payer to manage costs, prevent unnecessary or inappropriate use of healthcare resources, and ensure the care aligns with evidence-based standards. Understanding this process is important for patients and providers because approval must be secured before the treatment, otherwise the patient may be financially responsible for the full cost.
The Core Definition and Types of Utilization Review
Prospective review is a specific activity within a broader system known as Utilization Review (UR), which evaluates the appropriateness and necessity of medical services. UR aims to ensure patients receive the right level of care in the most cost-effective setting without compromising quality. Payers, such as health plans and managed care organizations, mandate these reviews to ensure adherence to their coverage policies and clinical guidelines.
Prospective review is distinguished from other types of utilization review by the timing of the assessment; it occurs before the patient receives care. This contrasts with Concurrent Review, which happens while the patient is actively receiving treatment, such as during a hospital stay, to monitor the continued need for that level of care. A third type is Retrospective Review, which takes place after the service has been rendered and billed, often as a final audit to confirm that the provided care was medically necessary.
Navigating the Submission and Decision Process
The process begins when a healthcare provider submits a request for prior authorization, which must include extensive documentation to justify the need for the service. Required information typically includes the patient’s medical history, clinical notes detailing the current condition, and specific diagnosis and procedure codes (ICD and CPT/HCPCS). Providers must also submit a letter of medical necessity that explicitly links the requested service to the diagnosis and explains why it is the most appropriate course of action.
Once the request is received, a licensed clinical professional, such as a registered nurse, performs the initial review by comparing the submitted data against established, evidence-based clinical guidelines. These standardized criteria, often proprietary systems like InterQual or Milliman Care Guidelines (MCG), help reviewers determine if the proposed service meets the definition of medical necessity. If the request does not meet the initial criteria, it is escalated to a physician reviewer or medical director for a final determination.
Regulatory timelines dictate how quickly the payer must issue a decision, which varies depending on the urgency of the request. For standard, non-urgent requests, payers are typically required to respond within seven calendar days. If the patient’s health could be seriously jeopardized by a delay, an expedited review can be requested, which mandates a decision within 72 hours. The final decision is either an approval or an “adverse determination,” which is a denial of the service.
Specific Healthcare Services That Require Review
Prospective review is commonly triggered by services that are high-cost, elective, or frequently subject to misuse.
- Non-emergency surgeries, such as elective knee or hip replacements, spinal procedures, and cosmetic or reconstructive operations.
- Advanced diagnostic imaging, including Positron Emission Tomography (PET) scans and complex Magnetic Resonance Imaging (MRI) studies.
- High-cost or specialty medications, particularly those used to treat complex conditions like cancer or multiple sclerosis.
- Durable Medical Equipment (DME), which includes items like power wheelchairs and specialized hospital beds for home use.
- Certain types of ongoing therapy, such as long-term physical therapy, specialized behavioral health services, or home health care.
Understanding Denials and the Patient Appeals Process
When a prospective review results in an adverse determination, the payer must provide the patient and provider with a written rationale for the denial, including the specific clinical basis. If the provider and patient believe the service is necessary, they have the right to challenge the decision through a multi-stage appeals process, which starts with an internal appeal. The internal appeal requires the provider to submit additional clinical documentation or engage in a peer-to-peer discussion with the payer’s medical director to overturn the initial denial. The patient must adhere to strict deadlines, typically filing the internal appeal within 180 days of receiving the denial notice.
If the internal appeal is unsuccessful, the patient can then proceed to an external appeal, which is a review by an Independent Review Organization (IRO). An IRO is a neutral, third-party entity composed of clinical experts who are not affiliated with the insurance company, and their decision is legally binding on the payer. The timeline for an external appeal is also regulated, with standard reviews typically requiring a decision within 45 days of the request. For urgent medical situations, the external review must be completed within 72 hours.