What is the purpose of prior authorization in drug claims?

The primary purpose of prior authorization in drug claims is to manage costs and approve specific drug use. This process requires healthcare providers to obtain approval from a patient's insurance company before prescribing certain medications. The insurance companies implement prior authorization to control expenses associated with high-cost drugs or those that may not be deemed medically necessary. By reviewing the necessity and appropriateness of the prescribed medication, insurance companies can help ensure that patients receive medications that are not only effective but also serve to manage overall healthcare costs.

This strategy allows insurers to promote the use of alternative, often more cost-effective therapies when appropriate, while also ensuring that prescribed medicines align with established treatment guidelines. Prior authorization processes thus serve a critical role in balancing patient care with responsible financial stewardship in healthcare.