Eligibility and prior authorization: what is the difference?

Both are about permission, but they answer different questions.

Eligibility asks: is this patient’s insurance active today, and what does it cover? It is a quick lookup with the payer, it is cheap, and smart billers run it before the visit rather than after a denial. An eligibility check also tells you where the patient stands on their deductible, which is often the difference between collecting at the desk and chasing a balance for two months.

Prior authorization is the payer’s permission in advance for a specific service, granted before the care happens. Certain procedures require it. If the service is performed without it, the payer can refuse the whole claim, and the code you will see is CO-197.

The practical difference: eligibility is something you can check any time, in seconds. A prior authorization has to exist before the visit, which means the miss usually happened weeks before the denial landed on your desk.

Neither one is free. Any check that contacts a payer shows you its price and asks you to confirm before it runs. See What can the assistant do, and does it ever act on its own?.

If a claim was denied for coverage rather than for care, start here: What if the coverage was not active that day?.