What is the relationship between prior authorization and coding?

The relationship between prior authorization and coding is primarily centered around the necessity of ensuring that certain medical procedures or services are deemed medically necessary before they are coded and billed to insurance companies. This process occurs because payers want to confirm that the services being requested are appropriate for the patient's condition and are in line with established medical guidelines.

When prior authorization is obtained for specific procedures, it serves as an advance agreement from the insurance provider that the service will be covered based on the documentation submitted. Once the procedure is authorized, accurate coding can proceed, ensuring that the healthcare provider is correctly reimbursed for the service provided.

This contrasts with the other choices which do not accurately capture the nuanced function of prior authorization in the context of coding. For example, while some procedures may require prior authorization, it is not universally applicable to all procedures. Additionally, prior authorization is not focused on verifying patients' identities; rather, it serves to validate the necessity and appropriateness of healthcare services. Lastly, prior authorization can extend beyond just hospital admissions to include various outpatient procedures and treatments, making option concerning only hospital admissions incomplete in scope.