How it works
Each plan publishes a list of services that need approval — commonly advanced imaging, elective surgery, specialty drugs and some therapies. The provider submits clinical information through a portal, phone, fax or the electronic 278 transaction; the plan approves, denies or asks for more information. Approvals usually cover specific codes, a site of service, a number of units and a date range.
Why it matters
A missing or mismatched authorization leads to denials (often CO 197) that can be hard to reverse. Under a CMS rule, Medicare Advantage, Medicaid and certain other plans must, from 2026, issue decisions within 72 hours for expedited requests and seven calendar days for standard requests.
Example
An MRI is approved for one body part, but a different one is scanned. The claim denies even though an authorization exists. Comparing the approved codes with what was performed would have caught it. See prior authorization services.