What is one of the main benefits of preauthorization?

One of the main benefits of preauthorization is that it ensures coverage for services or procedures. This process involves obtaining approval from an insurance company before a patient can receive certain medical treatments, tests, or procedures. By securing this approval in advance, healthcare providers can confirm that the services will be covered under the patient's insurance plan. This minimizes the risk of unexpected costs for the patient and enables providers to properly bill the insurance for the services rendered. By ensuring that coverage is in place prior to treatment, preauthorization helps protect both the patient and the provider from potential financial discrepancies and denials that may arise after services have been provided.

In contrast, while reducing paperwork might seem beneficial, preauthorization typically requires additional documentation and communication between healthcare providers and insurers, which can increase administrative work. Eliminating the need for referrals is not a function of preauthorization, as referrals often remain necessary depending on the treatment and insurance policy. Additionally, preauthorization can sometimes lead to longer patient wait times as patients and providers must wait for approval before proceeding with care. Thus, the primary and most significant advantage of this process is the assurance it provides regarding coverage.