What is "prior authorization" in the context of URAC practices?

Prior authorization is a process that requires healthcare providers to obtain approval from a health insurance company before delivering certain services or treatments to patients. This process is designed to ensure that the proposed services are medically necessary and meet the criteria established by the insurance provider. By requiring prior authorization, insurers aim to control costs and ensure that patients receive appropriate care while reducing unnecessary expenditures.

This concept is essential in URAC practices, as URAC focuses on improving the quality of healthcare and ensuring that patients receive services that are clinically justified. The prior authorization process helps in managing healthcare resources effectively and assures that the services align with clinical guidelines.

In contrast, the other options pertain to different aspects of healthcare: health insurance plans refer to the structures of coverage available to consumers, credentialing processes focus on verifying the qualifications of healthcare providers, and billing procedures specifically relate to the financial aspects of medical services. These do not encapsulate the essence or function of prior authorization in the context of URAC practices.