Precertification, predetermination, and the words around authorization
The vocabulary around prior authorization is loose, and the looseness is not harmless. Precertification and prior authorization are the same instrument under different names. Predetermination is a different instrument that commits the payer to less. Knowing which one you are holding decides what you can rely on at the claim.
#Prior authorization and precertification: one thing, several names
The federal glossary defines preauthorization as "a decision by your health insurer or plan that a health care service, treatment plan, prescription drug or durable medical equipment is medically necessary", and notes it is "sometimes called prior authorization, prior approval or precertification". One instrument, four names, and a payer's own documents may use any of them.
The same glossary carries the caveat this whole library keeps repeating: preauthorization "isn't a promise your health insurance or plan will cover the cost". An authorization number is a medical-necessity decision, not a payment guarantee, and eligibility at the date of service still governs. That is stated at What prior authorization actually is and it is worth reading in the government's own words.
#Predetermination: a different instrument
Predetermination is a voluntary, written advance review: the practice sends the planned codes and documentation, and the payer returns what it expects to cover and what it expects the patient to owe. Think of it as a priced dry run of the claim. Payers differ on the word and the mechanics - some call it a pre-treatment estimate, some fold it into "predetermination of benefits" - and the payer's own definition governs.
| Prior authorization / precertification | Predetermination | |
|---|---|---|
| Required? | Yes, where the plan mandates it. Skipping it risks denial of the whole claim. | No. It is requested, not required. |
| What it decides | Medical necessity for a specific service, member and window. | Expected benefits: what the plan would pay and what would fall to the patient. |
| What you get | An authorization number the claim must carry. | A written estimate. Usually no number the claim depends on. |
| Binding? | Not a payment promise, but the claim is matched against it. | Explicitly an estimate. Eligibility, accumulators and plan terms at service date govern. |
| Typical use | Services on the plan's authorization list. | Expensive or coverage-ambiguous services, unlisted codes, and financial conversations with the patient. |
The practical reason to request one is the financial conversation. A patient deciding about an expensive procedure deserves a number that came from the payer rather than from the practice's arithmetic, and deductible position changes the answer in ways only the payer's systems see. The estimate can still move between the letter and the service date - the patient's deductible may be met in between, coverage may change - and an estimate that moved is not a payer error.
#The Medicare version is its own thing: the ABN
For Original Medicare (fee-for-service), the instrument for expected non-coverage is the Advance Beneficiary Notice of Noncoverage, form CMS-R-131. A provider issues it before furnishing an item or service when Medicare payment is expected to be denied. It tells the beneficiary that Medicare may not pay, lets them decide whether to proceed, and - properly issued - transfers the potential financial liability to the beneficiary rather than the provider absorbing it.
#Notification is not approval
Some plans require notification for certain events - commonly an inpatient admission - where the plan must be told within a deadline but is not being asked to approve in advance. A notification requirement met is not an authorization obtained, and the reverse is also true. The plan's document says which one applies; recording which word the payer used, and what it commits them to, is the cheap discipline that prevents the expensive argument.