Insurance Eligibility and Prior Authorization
What eligibility work actually covers
Verification confirms the plan is active on the date of service, that the patient is covered for the service type, and the financial terms that drive the patient estimate: deductible, copay, coinsurance, and out-of-pocket maximum. Confirm identity, member ID, group number, plan type (HMO, PPO, POS), network status of the rendering and facility providers, and any waiting periods or exclusions. Coordination of benefits must be settled before claim submission. Two commercial plans are usually ordered by the birthday rule (the subscriber whose birthday falls earlier in the year is primary); Medicare secondary payer rules follow federal statute and are not decided by birthday logic.
Referrals versus prior authorization
A referral is permission to see a specialist. Prior authorization (precertification) is payer approval of a specific service and usually carries a number, an effective date range, and approved units. Common targets include advanced imaging, surgery, DME, specialty drugs, and inpatient admission. Authorization for the professional claim does not automatically cover the facility claim, and a change of date or provider may require a new authorization. Document the auth number, who obtained it, the approved codes and dates, and retain the confirmation.
Traps
Assuming "active coverage" means "covered service." Missing retro-authorization deadlines. An auth code that does not match the billed CPT or HCPCS code, which is a leading denial cause. For Medicare, billing a patient for a service the payer considers non-covered without a properly completed ABN and the correct option box.
Rule of thumb
Verify a few business days before the visit, re-verify on the day of service for high-cost services, and treat any authorization as valid only for the exact code, provider, and date range on the approval.