Glossary · Authorization

Prior authorization vs. precertification vs. predetermination

Payers use 'prior authorization,' 'precertification,' and 'predetermination' loosely and often interchangeably. The distinctions matter — and so does the fact that none of them guarantees the claim will pay.

Prior authorization, precertification, and predetermination are overlapping terms for a payer's pre-service review. 'Precertification' and 'prior authorization' are usually used interchangeably for a required approval that a planned service is covered and medically necessary; 'predetermination' is typically a non-binding estimate. Missing a required authorization drives a CO-197 denial.

The terms, untangled

  • Prior authorization / precertification — a required, pre-service approval; without it the claim can deny as CO-197.
  • Predetermination — usually a voluntary, non-binding estimate of coverage, not a guarantee.
  • Notification — simply telling the payer a service will occur, where required, without a full review.

Approval is not payment

An authorization confirms medical necessity for a planned service — it does not guarantee the claim will pay. Eligibility can lapse, the service can be coded differently than authorized, coordination-of-benefits or other edits can intervene. So an approved prior auth is a strong appeal argument against a CO-197, but it isn't a blanket promise of payment, and the two shouldn't be confused.

An auth answers 'is it necessary?', not 'will it pay?'

Reconcile the authorization to the claim — same codes, dates, and units — and confirm eligibility. An auth that doesn't match the claim is a common, fixable CO-197 cause.

Frequently asked

Does prior authorization guarantee payment?
No. It confirms medical necessity for the planned service, but eligibility, coding mismatches, COB, and other edits can still cause a denial.
Is precertification different from prior authorization?
In practice they're used interchangeably for a required pre-service approval. 'Predetermination' is the different one — it's usually a non-binding estimate.

Primary sources: CMS — Interoperability & Prior Authorization Final Rule (CMS-0057-F). General information, not legal or medical advice — confirm against the governing rule for the plan type.

Related guides

CO-197 · Prior authorization absentPrior authorization (physician guide)Peer-to-peer review

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