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Reference

Prior Authorization and Diabetes Technology Glossary

Plain definitions for the terms you will see on payer forms, coverage policies and denial letters.

Developed and reviewed by the ADCES Diabetes Technology Committee. Last reviewed October 2026

About these definitions: General definitions for education. Payer terms, criteria and processes vary by plan.

29Terms defined

Easily confused

Terms that sound alike but mean different things. Select a term for its full definition.

Which benefit covers it?
Medical benefitMedical services and certain equipment and supplies
DME benefitPart of the medical benefit. Certain CGMs, pumps and supplies, often from an approved DME supplier
Pharmacy benefitMedications and devices dispensed through a pharmacy, including CGMs and some wearable insulin-delivery devices

It depends on the plan. Benefit verification tells you which applies.

Policy or criteria?
Clinical coverage policyThe payer document
Clinical coverage criteriaThe specific clinical requirements the document sets out
Payer-specific criteriaWhy the same device can have different requirements on different plans

Read the policy to find the criteria.

Before the requested therapy
Preferred therapyWhat the payer favors for coverage
Step therapyThe requirement to try preferred therapies first
Prior therapyWhat the person has already used, with outcomes

Document prior therapy when required, or provide clinical justification for an exception to step therapy or preferred therapy requirements, as applicable.

Challenging a denial
AppealA formal request to reconsider
Written appealThe written request, built on the stated denial reason and evidence
Peer-to-peer reviewA conversation between the prescriber and the payer’s reviewer

They can run at the same time, but a peer-to-peer request does not pause the appeal deadline.

TermDefinitionWhere you’ll use it

Administrative requirements

The nonclinical requirements that must be completed for a prior authorization request to be processed, such as use of a specific form or portal, required fields, signatures, supporting documents or submission method. Administrative requirements vary by payer and plan.

Where you’ll use itPrepare, step 2

Appeal

A formal request asking a health plan to reconsider a denial of coverage. An effective appeal addresses the specific reason for denial and provides documentation showing how the person meets the payer’s coverage criteria.

Where you’ll use itRespond to a Denial, step 4

Approval period

The length of time a payer authorizes coverage for a medication, device, service or supply. When the approval period ends, reauthorization or renewal may be required to continue coverage.

Where you’ll use itPA-Ready Practice: renewal tracking

Artificial intelligenceAI

Technology that can assist with tasks such as organizing clinical information, identifying documentation gaps and drafting structured language. AI-generated content must be reviewed for accuracy, privacy and compliance, and verified against the medical record and current payer requirements before use.

Where you’ll use itPrepare, steps 4 and 5

Automated insulin delivery systemAID

A system that combines an insulin pump, continuous glucose monitor (CGM) and algorithm to automatically adjust insulin delivery based on glucose data. PA requirements may include documentation related to insulin therapy, CGM use, training and other payer-specific clinical criteria.

Where you’ll use itPrepare, step 3

Benefit verification

The process of confirming a person’s health plan coverage for a specific medication, device, service or supply. Benefit verification can help identify the applicable benefit, whether prior authorization is required and other coverage requirements that may affect access.

Where you’ll use itPrepare, step 2

Clinical coverage criteria

The specific clinical requirements a payer uses to determine whether a medication, device, service or supply qualifies for coverage. Criteria may include diagnosis, insulin use, laboratory values, hypoglycemia history, previous therapies, visit frequency or other requirements and vary by payer and plan.

Where you’ll use itPrepare, step 3

Clinical coverage policy

A payer document describing the criteria and documentation requirements used to determine coverage for a particular therapy, service or technology. Reviewing the policy before submitting a prior authorization can help identify exactly what must be documented.

Where you’ll use itRespond to a Denial, step 3

Continued coverage

Ongoing payer coverage for a previously approved medication, device, service or supply. Continued coverage may depend on meeting plan-specific requirements, such as follow-up visits or documentation of continued medical necessity. These requirements do not always involve obtaining a new prior authorization.

Where you’ll use itPA-Ready Practice: renewal tracking

Denial

A payer’s decision not to approve a requested medication, device, service or supply. A denial should identify the reason coverage was not approved and may provide instructions for reconsideration or appeal.

Where you’ll use itRespond to a Denial, step 1

Diagnosis code

A standardized code used to identify a person’s diagnosis or clinical condition. Diagnosis codes submitted with a prior authorization should accurately reflect the documented clinical picture because payers may use them when applying coverage criteria.

Where you’ll use itPrepare, step 3

Durable medical equipment benefitDME

The portion of a health plan’s medical benefit used to cover certain medical equipment and supplies. Some diabetes devices/technologies, including certain CGMs, insulin pumps and related supplies, may be processed through the DME benefit and may need to be obtained from an approved DME supplier rather than the pharmacy benefit.

Where you’ll use itPrepare, step 2

Electronic health record smart phrase/dot phraseEHR

A shortcut tool built into an electronic health record that lets users insert prewritten blocks of text, templates or patient data. Smart phrases or dot phrases can help care teams consistently capture information commonly needed for prior authorization, such as diagnosis, insulin regimen, glucose monitoring, laboratory results, hypoglycemia history and medical necessity.

Where you’ll use itPA-Ready Practice: documentation templates

Formulary/preferred drug list

A health plan’s list of covered prescription medications and, in some cases, related products. Formularies may designate preferred products and establish requirements such as prior authorization or step therapy. This list is continually updated and coverage varies by health plan.

Where you’ll use itPrepare, step 2

Initial prior authorization

The first request submitted to a payer for authorization of a medication, device or service. Initial requests generally require clinical documentation demonstrating that the payer’s coverage criteria are met.

Where you’ll use itPrepare and Follow Up

Letter of medical necessityLMN

A clinical letter explaining why a requested medication, device or service is medically necessary for a particular person. A strong LMN connects the person’s documented clinical history and needs with the requested device and applicable payer coverage criteria.

Where you’ll use itPrepare, step 5

Medical benefit

The portion of health insurance that covers medical services and certain equipment and supplies. Some diabetes technology is covered through the medical or DME benefit rather than the pharmacy benefit.

Where you’ll use itPrepare, step 2

Medical necessity

The clinical rationale demonstrating why a particular medication, device, service or supply is needed for an individual. For prior authorization, documentation should clearly connect the person’s clinical circumstances with the need for the requested device.

Where you’ll use itPrepare, step 5

Medical necessity exception

A request for coverage of a medication, device, service or supply that does not meet a payer’s standard coverage requirements but is clinically appropriate for an individual’s needs. Supporting documentation explains why the requested therapy is medically necessary and why available covered alternatives may not be appropriate. Exceptions are subject to payer-specific requirements and approval.

Where you’ll use itDenial response and appeals

Objective clinical evidence

Documented clinical information used to support a coverage request or appeal, such as laboratory values, A1C results, glucose reports, documented hypoglycemic events and treatment history.

Where you’ll use itRespond to a Denial, step 4

Payer

The organization responsible for administering health coverage and determining whether health care services, medications, devices or supplies meet the plan’s coverage requirements.

Payer-specific criteria

Coverage requirements established by an individual payer or health plan. Requirements and documentation can differ across plans, even for the same diabetes technology/device.

Where you’ll use itPA-Ready Practice: payer criteria sheet

Peer-to-peer reviewP2P

A discussion between the treating clinician or prescriber and a payer’s clinical or medical reviewer about a coverage decision. A P2P may be used to clarify the clinical rationale, address a denial or demonstrate how the person meets the payer’s stated criteria.

Where you’ll use itRespond to a Denial, step 5

Pharmacy benefit

The portion of health insurance used to cover prescription medications and certain diabetes technologies/devices and supplies dispensed through a pharmacy. CGMs, supplies and some disposable or wearable insulin-delivery devices may be processed through the pharmacy benefit depending on the plan.

Where you’ll use itPrepare, step 2

Preferred therapy/product

A medication, device or other therapy that a payer generally requires or favors for coverage over an alternative product. A person may be required to use a preferred option before another therapy is covered.

Where you’ll use itRespond to a Denial, step 2

Prior authorizationPA

A utilization management process that requires a health plan to review a request for a medication, device, service or supply before coverage is authorized. Approval generally depends on documentation demonstrating that the plan’s applicable coverage criteria and requirements have been met.

Where you’ll use itPrior Authorization overview

Prior therapy

A medication, treatment, monitoring approach or device used before the requested therapy. Payers may require documentation of previous therapies and their outcomes as part of prior authorization or step therapy requirements.

Where you’ll use itPrepare, step 3

Reauthorization/renewal

The process of obtaining continued payer approval after an existing authorization expires. Renewal may require updated clinical information and documentation demonstrating continued eligibility and/or benefit of a previously authorized treatment.

Where you’ll use itPA-Ready Practice: renewal tracking

Reconsideration

A request asking a payer to review a previous coverage decision, often with clarification or additional clinical documentation. Reconsideration may be part of the formal appeals process or a separate review option, depending on the payer. A reconsideration request does not necessarily extend or replace a formal appeal deadline.

Where you’ll use itDenial response and appeals

Step therapyST

A coverage requirement in which one or more payer-preferred therapies are trialed before the requested therapy will be covered. Documentation of the therapies tried and their outcomes is typically required.

Where you’ll use itRespond to a Denial, step 2

Utilization management

Processes used by health plans to evaluate and manage the use of health care services, medications and technologies/devices. Prior authorization and step therapy are examples of utilization management tools.

Where you’ll use itPrior Authorization overview

Written appeal

A formal written request for reconsideration following a coverage denial. The appeal should address the payer’s stated reason for denial, provide relevant objective clinical evidence and demonstrate how the applicable coverage criteria are met.

Where you’ll use itRespond to a Denial, step 4
Return to Prior Authorization Overview

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