What is meant by the terms "pre-authorization" and "prior authorization" in healthcare?

The terms "pre-authorization" and "prior authorization" refer specifically to the requirement for healthcare providers to obtain approval from a payer, such as an insurance company, before delivering certain medical services or treatments to patients. This process is essential in ensuring that the services being proposed are medically necessary and covered under the patient's insurance policy.

When a healthcare provider submits a request for pre-authorization, they must provide detailed information about the patient's condition, the proposed treatment, and why it is warranted. The payer reviews this information to determine whether the service aligns with their coverage criteria. If approved, the provider can proceed with the treatment, and the insurance company will cover the costs as per the patient's plan, minimizing financial risk for both the patient and the provider.

The other options do not accurately reflect the definitions of "pre-authorization" or "prior authorization." A payment plan relates to how patients might handle billing and costs, rating methods pertain to evaluations of healthcare providers rather than authorization processes, and documentation of medical services rendered focuses on record-keeping rather than the approval needed before those services are delivered. Therefore, the correct answer encompasses the fundamental concept of medical services approval in the healthcare industry.