The prior authorization (PA) process healthcare providers endure is a story of unintended consequences. Created as a utilization management tool for healthcare insurance companies to control costs and protect patients from surprise bills, it has increasingly created heavy administrative burdens, increased claim denials and rework, and delays in care for patients. Medicare Advantage (MA) plans have become notorious for their high denial rates. The share of all PA requests that were denied by MA plans increased from 5.7% in 2019 to 7.4% in 2022ⁱ. PA process challenges, whether related to commercial or government coverage, have a negative impact on providers’ financial performance and cause unnecessary stress for billing teams and patients alike.

Addressing the root causes of process delays, administrative bloat, and claim denials that lead to write-offs is complicated — especially with increasing PA demands from payers. Rules differ from payer to payer and from plan to plan, and the rules change frequently. Typically, the process is highly manual and requires administrative staff to search paper documentation, PDFs, and payer web portals. Physicians and other providers must review the PA requests and medical charts, robbing them of time — 12 hours per week on average, according to the “2023 AMA prior authorization physician survey” — that could be spent with patients.ⁱⁱ

If PA is required, providers must track down specifics pertaining to each current procedural terminology (CPT) code applicable to the prescribed treatment. They also must obtain a number assigned by the payer that corresponds to the PA request and include it when the final claim is submitted. The responsibility falls on the provider to continue to follow up with the payer until there is a resolution to the request — an approval, redirection, or denial. Depending on the complexity, the level of manual work involved, and the requirements stipulated by the payer, a PA can take anywhere from one day to a month to process.

ⁱKaiser Family Foundation. KFF website, Aug. 8, 2024, https://www.kff.org/medicare/issue-brief/use-of-prior-authorization-in-medicare-advantage-exceeded-46-million-requests-in-2022/. Accessed 10 Oct. 2024.
ⁱⁱAmerican Medical Association. 2023 AMA Prior Authorization Physician Survey, https://www.ama-assn.org/system/files/prior-authorization-survey.pdf. Accessed 9 Oct. 2024