Predetermination Vs Prior Authorization- The Difference

Ever received a medical bill you thought insurance would cover, only to find out it was denied or partially paid?

In many cases, the confusion comes down to two misunderstood terms: predetermination and prior authorization.

Both happen before treatment, but they serve very different purposes. One helps you estimate costs, while the other is often required for coverage approval. When patients mix them up or skip a required step, it can lead to unexpected expenses, delayed care, or denied claims.

Understanding how these two processes work can save you money and prevent frustrating insurance surprises.

What is Predetermination?

Predetermination (sometimes called a pre-treatment estimate) is when you or your healthcare provider asks the insurance company for an estimate of coverage before getting a service.

In simple terms, it answers this question:

“If I have this procedure done, how much will insurance likely pay, and how much will I pay out of pocket?”

Insurance reviews your benefits and the proposed service, then sends back a breakdown showing expected coverage and patient responsibility.

Key points about predetermination:

• Usually optional, not always required
• Helps you understand costs in advance
• Most common in dental procedures like crowns, implants, and major treatments
• Sometimes used for planned medical services as well
• Provides an estimated payment amount from insurance

Predetermination is mainly a budgeting tool. It helps you prepare for expenses, but it does not guarantee payment or approval.

What is Prior Authorization?

Prior authorization is when your insurance company requires approval before they agree to cover a specific service, test, procedure, or medication.

In simple terms, it means:

“You must get permission first, or your insurance may not pay.”

Your provider usually submits medical details to show why the service is needed. The insurance company then reviews it to decide if it meets coverage rules. Some plans use the terms precertification and preauthorization interchangeably, which can be confusing. This breakdown on the difference between precertification and preauthorization explains how insurers use each term.

Key points about prior authorization:

• Often required for certain treatments and tests
• Confirms the service is medically necessary and covered by your plan
• Common for MRIs, CT scans, surgeries, specialty medications, and ongoing therapies
• Missing prior authorization can lead to claim denial or full patient responsibility

Prior authorization controls whether insurance will cover a service. Predetermination only helps estimate costs.

Predetermination vs Prior Authorization Comparison Table

Real-World Examples

Example 1: Dental Crown (Predetermination)

Your dentist recommends getting a crown. Before moving forward, you request a predetermination from your insurance company. They review your benefits and send back an estimate showing how much they are likely to cover and how much you will need to pay.

This helps you plan your budget and decide whether to proceed with the treatment.

Example 2: MRI for Knee Pain (Prior Authorization)

Your doctor orders an MRI to understand the cause of your knee pain. Your insurance plan requires prior authorization for this type of imaging. Your provider submits the request, and insurance must approve it before the scan is done.

If the MRI is completed without approval, the claim may be denied and you could be responsible for the full cost.

Do Predetermination and Prior Authorization Guarantee Payment?

In most cases, predetermination does not guarantee payment. It is based on your current plan rules and the information submitted, but the final amount can still change. This may happen if:

• Your benefits change, such as a new plan year or a deductible reset
• The procedure or billing code is different from what was submitted
• The provider is out of network
• The documentation does not match what the insurance expected

Predetermination is helpful for planning costs, but it is not a payment promise.

Prior authorization comes much closer to confirming coverage, but it also does not guarantee payment in every situation. Even with approval, issues can still affect the claim, including:

How Long Does Predetermination and Prior Authorization Take?

The time it takes to receive a response depends on the insurance company, the type of service, and how complete the information is.

Predetermination usually takes anywhere from a few days to two weeks.

Dental requests are often processed within a week, while larger medical procedures may take longer. Since predetermination is mainly for cost estimates, it is not treated as urgent in most cases.

The time it takes for prior authorization depends on whether the request is routine or urgent.

• Routine requests typically take 3 to 10 business days
• Urgent or emergency cases may be reviewed within 24 to 72 hours
• Some complex cases can take up to two weeks if more medical records are needed

If you want to understand the full process, here is a detailed guide to prior authorization.

Insurance companies are required to follow set review timeframes, but delays can happen if paperwork is incomplete or additional information is requested.

To avoid slowdowns, it helps to confirm that your provider submitted all required documents and to follow up with your insurer if you have not received a response.

Conclusion

Health insurance can already feel confusing, and terms like predetermination and prior authorization often make it even harder to understand what is actually required before treatment. The good news is that once you know the difference, it becomes much easier to avoid surprises and feel more in control of your care.

Predetermination is useful when you want a clear idea of costs ahead of time, while prior authorization is important for making sure insurance will cover certain services. Taking a few minutes to ask the right questions before treatment can save you stress, delays, and unexpected bills later.

For healthcare providers who handle large volumes of approvals, outsourcing prior authorization is often a practical way to stay efficient while maintaining accurate documentation.
If something is unclear, do not hesitate to call your insurance company or ask your provider’s billing team. A quick conversation now can prevent bigger problems later.