Definition
Pre-Authorisation
Pre-authorisation is the insurer's or TPA's approval of a cashless hospitalisation before or shortly after admission, confirming the claim's eligibility and estimated amount.
For planned treatment, the network hospital sends a pre-authorisation request with the diagnosis and cost estimate to the TPA, which approves an initial sanctioned amount so treatment can proceed cashless. For emergencies, authorisation is sought within a stipulated window after admission.
IRDAI has set turnaround norms requiring insurers to grant cashless pre-authorisation and final discharge approval within tight timeframes to curb the delays patients often face. The pre-authorised amount can be revised as the hospital provides updated bills during the stay.
Related terms
- Network HospitalA network hospital is a healthcare provider that has a tie-up with the insurer or TPA to offer cashless treatment to policyholders.
- Cashless ClaimA cashless claim is a settlement method where the insurer or TPA pays the network hospital directly, sparing the policyholder from upfront payment of covered costs.
- Third-Party Administrator (TPA)A Third-Party Administrator is an IRDAI-licensed intermediary that processes health insurance claims and manages cashless services on behalf of insurers.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.