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- Medical schemes use pre-authorisation before you get expensive medical treatment to check you are a member of the scheme, you have the necessary benefits and that your treatment is cost-effective.
- The letter confirming pre-authorisation should outline any co-payments or potential shortfalls.
- Pre-authorisation does not guarantee payment of your claim, but it does help prevent claims that are denied or short-paid.
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Re-authorisation is often required before hospital admission, day hospital procedures, scans, scopes, or before beginning expensive treatment.
Schemes need to specify in their rules which benefits require pre-authorisation.
Pre-authorisation should be confirmed in writing.
The letter confirming pre-authorisation should outline any co-payments or potential shortfalls.
Pre-authorisation does not guarantee payment of your claim, but it does help prevent claims that are denied or short-paid.
Pre-authorisation is a process medical schemes put in place to ensure that before you get expensive medical treatment, the scheme has checked you are a member of the scheme, you have the necessary benefits and that your treatment is cost-effective.
Schemes specify which benefits are subject to pre-authorisation in the rules of the scheme.
- As a member, you will typically need to get a pre-authorisation number from your scheme before:
- You are admitted to a hospital;
- You have a procedure at a day hospital or in a specialist or surgeon’s rooms, especially a procedure involving an expensive scan or a scope; or
- You begin expensive out-of-hospital treatment that is subject to your scheme’s managed care programme.
- For example, oncology treatment.
In the case of emergency treatment, the hospital may seek pre-authorisation on your behalf or your family may be expected to obtain authorisation as soon as possible.
The purpose of pre-authorisation
The purpose of a scheme requiring you to obtain pre-authorisation is to ensure that:
- You are a member of the scheme and your membership has not been suspended or terminated;
- You have appropriate benefits available;
- The provider is an accredited healthcare practitioner; and
- The treatment is appropriate and cost-effective.
For example, you may be required to try certain treatments for a condition without success before you will be allowed benefits for surgery.
What you need for pre-authorisation
In order to grant pre-authorisation, the scheme will typically require:
- The name and practice number of the treating provider;
- The name and practice number of the healthcare facility;
- The ICD10 code for your diagnosis;
- The codes for the procedures the healthcare provider will perform; and
- The dates on which you will be treated.
Get confirmation
If you call your scheme’s administrator or managed care provider to obtain a pre-authorisation number, you may receive it verbally but it should be followed up with written confirmation.
The written confirmation should include:
- The authorisation number;
- The procedures that were approved;
- The date for which treatment was approved;
- The healthcare provider that was approved to deliver the treatment / procedure;
- The facility at which treatment was approved;
- Any exclusions on your cover that could result in a shortfall in payment by your scheme;
- Any benefit limits that could result in a shortfall in payment by your scheme;
- The scheme rate for any treatment and whether your provider may charge more than the rate at which your scheme will reimburse resulting in a shortfall;
- Whether you are required to use your scheme’s network and whether any provider or facility you are using is not part of that network which could result in a payment shortfall or co-payment;
- Any further information you will be required to submit before the scheme will make payment.
It doesn’t mean your claim will be paid
Members often mistakenly believe that pre-authorisation means their claims will all be paid in full.
It does not.
Ideally, your scheme should inform you when you seek pre-authorisation whether:
- You do not enjoy cover because the treatment is excluded.
- You do not enjoy cover because a waiting period has been applied to your membership.
You may be liable for a co-payment because:
- The procedure you are having is subject to a co-payment;
- The facility you are using is not one in the scheme’s network; or
- The treatment you are accessing is a prescribed minimum benefit (PMB) but you are not using the scheme’s designated service provider.
Your scheme has an overall benefit limit or sub-limit that may be applied to your admission or treatment and which may result in your claim being short-paid.
Your provider is one who may charge you more than the tariff rate at which the scheme reimburses for the procedure the provider will perform.
Your scheme excludes cover for certain expensive materials or procedures related to your treatment, such as a prosthetic device or mesh used in an operation.
During any procedure or treatment, your condition or treatment requirements may change which may result in you needing to get additional authorisation.
When you are in hospital, your case is typically managed by a hospital case manager who obtains authorisation from your medical scheme on your behalf.
Reconciliation after pre-authorisation
After your treatment, the Council for Medical Schemes says your scheme should reconcile the authorisation, the payment instruction received by the scheme from the managed care organisation or the administrator, and the claims payment, so that if the claim is not paid in full, the scheme can explain to you:
- Why a claim was short paid;
- Which items a provider should not have charged you for and for which neither you nor the scheme should be liable.
If pre-authorisation is denied
If pre-authorisation is denied, you can appeal to the medical scheme to reconsider.
The pre-authorisation letter from your scheme should explain how you can appeal against the decision by your scheme’s administrator or managed care entity on how much of your claim to pay.
If you are still unhappy with the outcome after you have appealed to the scheme, you can appeal to the Council for Medical Schemes.
Your scheme should also inform you how to apply for an ex-gratia payment.
The information in this article was sourced from a Council for Medical Schemes presentation on pre-authorisation.
This article was first published on SmartAboutMoney.co.za, an initiative by the Association for Savings and Investment South Africa (ASISA).
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