Insurance Terminology: MRN, referral, preauthorization, what’s the difference?

There are so many different terms that insurance companies use. It’s important to understand these terms so when you call payers you know which terminology they use and what it means.

Below are some definitions you should know.

Referral

• A referral is a document from a medical professional stating that a patient to receive a specific type of care. Referrals do not state how long or how often the patient should be seen for. 

Prescription

• Similar to a referral, it is a document from a medical professional stating that a patient should receive a specific type of care. The difference is that a prescription will also include how long and how often a patient is to receive the care.

Letter of Medical Necessity

• A document from a medical professional that states what the patient is experiencing and any limitations caused by the illness or injury and how the patient may benefit from a specific type of care

Signed Plan of Care (POC)

• A Plan of Care (POC) is created by the evaluating provider that states the limitations the patient has and sets goals within a given timeline. A signed POC is when the referring provider must sign and return the document to the evaluating therapist. Most often you will see this with patients that have Medicare. 

Pre-authorization/Pre-certification/Authorization/Certification

• A decision by an insurance company that services are medically necessary after a formal request has been made to the insurance company

Based on Medical Necessity

• This phrase is used by insurance companies to let you know that you will not need to make a formal authorization request. However, they do reserve the right to ask for medical documentation at any time to ensure that medical necessity was present at the time the patient had the visits.

Medical Necessity Review

• This refers to the process in which an insurance company asks for either all or specific documents related to the patient’s care to ensure that medical necessity was present and determine how many more visits the patient needs

Utilization Review

• Another term for Medical Necessity Review

Some insurances have their own terminology when it comes to authorization.

Cigna/American Speciality Health

• Refers to their authorization process as Medical Necessity Review (MNR)
• Since they do not ask for the clinical documentation that the therapists create, it is not a true medical necessity review

United Health Care

• Authorizations are known by several different names, but it is the same process
• Refers to their authorization process as Patient Summary Form (PSF), Advanced Clinical Notification (ACN) or Clinical Submission

Of course no matter the terminology used, any authorization that is granted is not a guarantee of payment. If the patient’s plan is inactive or if there is another reason that the claims cannot be paid on, there will be no payment even with an authorization.

Stay tuned for more blog posts like this one to help you be more informed and efficient in verifying your patients’ benefits.