Prior authorisation is an insurer's approval that a treatment will be paid for, given before the treatment happens. It is also called pre-authorisation or prior approval. Insurers require it for expensive tests, operations and medicines. In the United States, the process used to take days of faxes and phone calls. AI models now decide many requests in minutes. In the United States, a model may approve a request, but only a clinician may deny it.
Why do insurers ask for it? They want to be sure that an expensive treatment is needed before they pay for it. Doctors and patients dislike the process, because care waits while the paperwork is checked. New US federal rules now require many health plans to decide faster, and to accept requests electronically.
Consider a patient in Charlotte, North Carolina, in the United States, whose doctor wants an MRI scan of her knee. The clinic's ambulatory EHR sends the request to her insurer, with the doctor's notes. The insurer's AI model reads the notes and compares them with the plan's clinical criteria for a knee MRI. One criterion is at least six weeks of physiotherapy that did not help. The notes show eight weeks. So the model approves the request in about two minutes. The insurer's health plan administration system records the approval, and the scan is booked for the next day.
Now say the notes show only two weeks of physiotherapy. The model does not deny the request. It sends the case to a nurse or doctor employed by the insurer, with a summary of what is missing. The clinician decides. This split, in which the model drafts and a person makes the decisions that matter, is called human in the loop. Sorting clear cases from the ones that need a person is a form of triage. For serious illnesses such as cancer, the request is also checked against the treatment pathways in care management software.
Providers use AI too. On the clinic's end, AI medical billing agents gather the notes and prepare the request. Some specialist products prepare requests only for cancer care or home care. So, more and more, one model writes the request and another model reads it.
India has the same step for cashless hospital claims, where it is called pre-authorisation. The hospital's insurance desk sends the request to the insurer or its third-party administrator when the patient is admitted. IRDAI, the insurance regulator, has set a time limit of one hour for this decision. These requests are increasingly sent through the National Health Claims Exchange (NHCX).