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Pronunciation: pre'aw-thor-i-za'shun

Definition: A prerequisite, often intended as a rate-limiting or cost-containment step, in the provision of care and treatment to an insured patient. A practitioner who expects to be paid for a service must use paperwork and telephone contact with a designated entity (often clerks, but sometime medical professionals), often a TPA, to determine whether the proposed treatment or procedure is deemed medically necessary for the health and welfare of the covered party.

See Also: benefit, health maintenance organization, managed care, fee-for-service insurance, traditional indemnity insurance

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© Copyright 2018 Wolters Kluwer. All Rights Reserved. Review Date: Sep 19, 2016.