Cost Approval (Kostengutsprache)

Concept and Legal Bases

A cost approval is the payer’s prior assurance that it will reimburse a planned service. It provides legal certainty for providers and patients before costs are incurred and allows the insurer to review indication, cost-effectiveness and tariff. Basic insurance provides for it in several places: for inpatient treatment outside the canton of residence for medical reasons, the canton of residence pays its share only with a cost approval (Art. 41 para. 3 KVG); Annex 1 of the KLV expressly ties individual benefits – such as certain surgical procedures, genetic tests or rehabilitation stays – to prior cost approval by the insurer after consulting the medical examiner. Outside these cases, cost approval in basic insurance is declaratory, because the statutory entitlement does not depend on it.

Supplementary Insurance and International Practice

In hospital supplementary insurance under the VVG, by contrast, cost approval is an integral part of the policy conditions: before a planned admission to a semi-private or private ward, hospitals obtain the supplementary insurer’s confirmation of cover, and the insurer checks the insurance cover, any exclusions, waiting periods, recognition of the hospital and the agreed tariffs for additional services. Without approval the insured person risks bearing the additional costs. Functionally this corresponds to pre-authorisation in international private medical insurance (IPMI), where the insurer issues a guarantee of payment to the hospital after reviewing medical necessity and the treatment is settled by direct billing. Cost approval processes are also the entry point for case management and steering patients to suitable facilities.

Country Comparison

In Germany the health fund must decide on approval requests under § 13 para. 3a SGB V within three weeks, or five weeks if the Medical Service is involved; once the deadline passes the service is deemed approved. Private health insurers issue written benefit confirmations on request that are binding under the model terms. Austria has benefits subject to prior approval by the chief medical service of the ÖGK.