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Revision: Prior Review of Certain Services Is Required for Hospital Observation Setting

Release Date: August 13, 2012

Revision Date: November 16, 2012 

Note:  This article has been revised from the original version.  The footnote, numbered “2”, has been updated to correctly state BCBSNC requirements around diagnostic imaging services when performed during observation care (up to 48 hours) and when performed as inpatient services.  Previously, we stated “…when the imaging services are performed within the first 23-hours of observation care, and when they are performed as inpatient services.”

Blue Cross and Blue Shield of North Carolina (BCBSNC) requires that prior review (also referred to as prior plan approval, prior authorization, prospective review or certification)  be obtained from BCBSNC by a health care provider on behalf of a BCBSNC member in advance of their providing any service that requires prior review, as applicable to the member’s benefit plan.

BCBSNC utilizes prior review to help ensure that health care management guidelines that may apply to certain medical services and medications are met prior to those services being provided.  Inpatient admissions, services and procedures received on an outpatient basis, in an observation setting or doctor's office, and certain prescription medications may be subject to prior review.  However, services provided in an emergency room while a patient is believed to be in a possible emergent medical condition are exempt from prior authorization requirements.

Most BCBSNC participating providers are familiar with our prior review processes and requirements, and understand that through an advanced review of services we’re better able to:

  • Document medical necessity and appropriateness a of a particular service per a member’s benefit plan
  • Detect any co-morbidities or other problems that may require special discharge arrangements
  • Identify when there’s need for concurrent review
  • Recognize if a member is a candidate for referral to any applicable BCBSNC care management program

Recently, we learned that some providers may not be clear about our existing prior review requirements for services provided when a patient is in an observation setting.  We would therefore like to reiterate and further clarify that services requiring1,2,3 prior review from BCBSNC must receive advance approval from us regardless of if the services in question requiring prior review are scheduled to be performed in a physician’s office, outpatient or observation setting at a facility of care, or inpatient setting. 

BCBSNC will be updating its online provider manuals to reiterate and further clarify this prior review requirement information, as well as adding additional system enhancements in mid-October to assist in verifying that claims with prior review-required services are properly reviewed in advance by BCBSNC. 

If you have any questions about the prior review process, please contact your designated BCBSNC Strategic Provider Relationships representative.


1 Prior review of services is not required when provided during an emergency room encounter and administered to a patient with a possible emergent or life-threatening condition. 

2 Diagnostic imaging radiological services that are subject to prior review as part of BCBSNC’s diagnostic imaging management program administered by AIM (American Imaging Management, Inc.,) are exempt from prior review requirements when the imaging services are performed during observation care (up to 48 hours), and when they are performed as inpatient services. 

3 Services requiring prior review can vary depending on the BCBSNC product in which a member is enrolled.  Health care providers are encouraged to verify a member’s individual benefits and prior review requirements in advance of providing non-emergency services.