What is the term for pre-approval required before a drug is covered or dispensed?

What is the term for pre-approval required before a drug is covered or dispensed?

• A. Prior Authorization
• B. Step Therapy
• C. Formulary Tiers 1
• D. Net Price

Answer: (A)

Prior authorization is the process of obtaining pre-approval from a health plan before a specific drug is covered or dispensed. This review checks that the medication meets the plan’s criteria, often for expensive or high-risk therapies, and may require documentation from the prescriber about the patient’s condition and why this drug is necessary. If approved, coverage proceeds; if not, the medication may not be covered or the patient may face higher costs or need to try alternatives. The other terms work differently: step therapy requires trying a lower-cost option first before the desired drug is covered; formulary tiers affect copay or coinsurance levels rather than requiring pre-approval; net price is the price after rebates and discounts, not a pre-authorization step.

Prior authorization is the process of obtaining pre-approval from a health plan before a specific drug is covered or dispensed. This review checks that the medication meets the plan’s criteria, often for expensive or high-risk therapies, and may require documentation from the prescriber about the patient’s condition and why this drug is necessary. If approved, coverage proceeds; if not, the medication may not be covered or the patient may face higher costs or need to try alternatives. The other terms work differently: step therapy requires trying a lower-cost option first before the desired drug is covered; formulary tiers affect copay or coinsurance levels rather than requiring pre-approval; net price is the price after rebates and discounts, not a pre-authorization step.