What term describes a service that was approved by the payer before it was performed?

What term describes a service that was approved by the payer before it was performed?

• A. Precertification
• B. Preauthorization
• C. Preapproval
• D. Prior authorization

Answer: (B)

The key idea here is getting approval from the payer before performing a service to confirm coverage and medical necessity. This upfront review is done through preauthorization. It means the payer evaluates the requested service in advance and agrees to pay for it if it meets their criteria, helping prevent unexpected denials after the service is done. Some plans use similar terms like precertification or prior authorization, but in this context, the term that best matches “approved before the service was performed” is preauthorization.

The key idea here is getting approval from the payer before performing a service to confirm coverage and medical necessity. This upfront review is done through preauthorization. It means the payer evaluates the requested service in advance and agrees to pay for it if it meets their criteria, helping prevent unexpected denials after the service is done. Some plans use similar terms like precertification or prior authorization, but in this context, the term that best matches “approved before the service was performed” is preauthorization.