Approval from your health insurer that must be obtained before certain medical services, procedures, or medications are provided. Also called prior authorization, failing to get it when required can result in the insurer denying the claim or paying a reduced amount.
Related Terms
Claim
A formal request made by a policyholder to an insurance company for payment or reimbursement for a covered loss or policy event. Filing a claim triggers the insurer to investigate the loss, assess damages, and determine what amount is payable under the policy.
Explanation of Benefits
A statement sent by your health insurer after a claim is processed that shows what was billed, what the plan covered, what discount was applied, and what you owe. An EOB is not a bill, but it helps you understand how your benefits were applied to a specific service.
Formulary
A list of prescription drugs covered by a health insurance plan, organized into tiers based on cost. Generic drugs are typically on the lowest-cost tier, while brand-name and specialty drugs are on higher tiers with larger copays or coinsurance.