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Prior authorization

Prior authorization is a utilization management strategy implemented by health insurers, requiring physicians and other providers to obtain advance approval before delivering specific services, procedures, medications, or durable medical equipment to verify medical necessity and curb expenditures.^[1]^[2] The process typically involves submitting clinical documentation, after which insurers review requests—often using algorithms or non-physician reviewers—to approve, deny, or modify coverage, with timelines varying from hours to weeks depending on urgency and plan rules.^[3]^[4] Intended to promote evidence-based care and prevent overuse of high-cost interventions, prior authorization has expanded in scope, affecting an estimated 40% of claims in Medicare Advantage plans and contributing to billions in annual administrative spending.^[5]^[6] However, physician surveys and empirical analyses reveal substantial drawbacks, including treatment delays averaging 3–5 days that lead to care abandonment in up to 25% of cases, heightened patient risks such as disease progression or hospitalizations, and physician burnout from workloads consuming 14 hours weekly per practice.^[7]^[8]^[9] While insurers assert cost reductions through averted unnecessary services, studies indicate net increases in total healthcare expenses due to inefficiencies, appeals, and downstream complications, fueling bipartisan reforms like the 2024 CMS interoperability rules mandating faster decisions and transparency.^[10]^[11]

Definition and Historical Context

Core Definition and Scope

Prior authorization is a utilization management strategy employed by health insurers whereby healthcare providers must obtain advance approval from the payer before delivering specific medical services, procedures, treatments, or prescriptions to confirm medical necessity and eligibility for reimbursement.^[1]^[12] This process functions as a cost-containment mechanism, allowing payers to evaluate whether the requested intervention aligns with evidence-based guidelines, is deemed safe and effective, and represents the most appropriate and economical option available.^[13] Without such approval, the insurer may deny coverage, shifting financial responsibility to the patient or provider, though exceptions apply for emergencies where retrospective review may occur instead.^[13] The scope of prior authorization encompasses a broad array of non-emergent healthcare interventions, primarily within the United States' private commercial insurance, Medicare Advantage, and Medicaid programs, though it is less prevalent in traditional fee-for-service Medicare Parts A and B.^[13] Common services subject to this requirement include inpatient hospital admissions, skilled nursing facility stays, certain outpatient procedures such as magnetic resonance imaging (MRI), elective surgeries (e.g., blepharoplasty), durable medical equipment, home health services, and high-cost specialty pharmaceuticals or biologics.^[2]^[14] Therapies like physical or occupational therapy often trigger authorization after an initial threshold of visits, while advanced imaging, radiation therapy, chemotherapy, and dialysis may also necessitate pre-approval depending on the payer's criteria.^[2] Payers maintain specific lists of covered services requiring review, which vary by plan and are outlined in policy documents, with decisions informed by clinical guidelines from organizations like the Centers for Medicare & Medicaid Services (CMS).^[13] This framework does not extend uniformly to all care; preventive services under the Affordable Care Act, routine primary care, or urgent interventions are generally exempt to prioritize access.^[15] State regulations and federal oversight, including CMS rules for Medicare Advantage effective July 1, 2021, for select hospital outpatient department services like implanted spinal neurostimulators, further delineate its application, aiming to balance cost control with timely care delivery.^[16]

Origins in the 1980s and Evolution

Prior authorization originated as an extension of utilization review practices introduced with the enactment of Medicare and Medicaid in 1965, which mandated concurrent assessments of hospital admissions and lengths of stay by two physicians to ensure medical necessity and limit overuse of resources.^[17] These early reviews focused on inpatient care amid rising costs, but by the mid-1970s, private insurers developed precertification—requiring advance approval for specific procedures—to directly manage expenditures and mitigate fraudulent or unnecessary claims.^[18] The Health Maintenance Organization Act of 1973 accelerated the adoption of managed care models, providing federal incentives for HMOs and mandating their inclusion in employer benefits, which normalized pre-admission certification as a cost-containment strategy.^[19] In the 1980s, amid annual healthcare inflation exceeding 10 percent and the expansion of self-insured employer plans under the Employee Retirement Income Security Act of 1974, prior authorization formalized as a utilization management tool, extending beyond hospitalizations to outpatient services, surgeries, imaging, and select medications.^[19] Health plans, including HMOs and preferred provider organizations, implemented these requirements to audit clinical appropriateness and align reimbursements with evidence-based care, prompting the emergence of third-party vendors for processing by the late 1980s.^[19] From the 1990s onward, prior authorization proliferated with HMO enrollment surpassing 50 million members by the mid-1990s, broadening its scope to high-cost brand-name drugs and specialty therapies amid managed care dominance.^[19] Its application intensified in Medicare Advantage plans following the program's expansion under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, where utilization management tools like prior authorization grew to oversee services not subject to them in traditional fee-for-service Medicare.^[20] By the 2010s, requirements encompassed biologics and gene therapies costing thousands per dose, though processes remained predominantly manual via fax or phone despite electronic health record adoption, leading to calls for standardization.^[19]

Operational Mechanics

Standard Process Steps

The standard prior authorization process commences with the healthcare provider evaluating whether a proposed service, procedure, medication, or durable medical equipment necessitates pre-approval, typically by referencing the payer's coverage policies, formularies, billing guides, or utilization management criteria, while simultaneously verifying patient eligibility and coverage status.^[21]^[22] The provider then assembles requisite documentation, including standardized forms, patient clinical records, diagnostic details, treatment rationale, and supporting evidence demonstrating medical necessity, before submitting the request via payer-specified methods such as electronic health information exchanges, online portals, fax, or mail.^[21]^[23] Upon receipt, the payer conducts an initial review for submission completeness, followed by a substantive assessment of clinical appropriateness against internal guidelines, evidence-based criteria, or peer-reviewed standards, which may incorporate input from physician reviewers or require peer-to-peer consultations for complex cases.^[22]^[23] The payer issues a formal decision—provisional approval, denial, partial affirmation, non-affirmation, or request for supplemental information—typically conveyed in writing or electronically with a unique tracking number, adhering to timelines such as up to 14 calendar days for standard requests or 72 hours for expedited reviews in federal programs like Medicaid managed care and certain Medicare outpatient services, with forthcoming reductions to 7 days for standard Medicaid decisions by January 2026.^[22]^[23] If approved, the authorization remains valid for a defined period (e.g., 120 days in some Medicare contexts), enabling the provider to deliver the service; denials trigger potential appeals, where additional documentation or justification can be resubmitted without limit in certain systems.^[23]^[22] Following service provision, the provider submits the reimbursement claim incorporating the authorization reference, though approvals are provisional and subject to post-service audits or retroactive adjustments if new information emerges.^[23]^[22] While these steps represent a generalized workflow observed across public payers, private insurers may introduce variations in submission formats, review criteria, or timelines, though federal interoperability rules increasingly mandate electronic processes to streamline exchanges.^[22]

Documentation Requirements and Variations by Payer

Documentation for prior authorization typically encompasses clinical evidence of medical necessity, including patient medical history, relevant diagnoses supported by diagnostic tests, proposed treatment plans with rationale, and anticipated outcomes, submitted via payer-specific portals, forms, or faxes. These elements aim to verify alignment with coverage policies, but requirements proliferate administrative demands due to inconsistencies in format, detail level, and supporting data across payers. A 2024 analysis of private insurers revealed substantial policy divergence, with all mandating extensive prior authorization for physician-administered medications yet lacking consensus on precise documentation thresholds, necessitating customized submissions per insurer.^[24] In Medicare Fee-for-Service, documentation standards emphasize compliance with national coverage determinations, requiring providers to furnish medical records, physician attestations of necessity, and procedure-specific justifications for targeted services like certain hospital outpatient department procedures. For instance, under the Prior Authorization Process for Outpatient Department Services, unchanged documentation protocols demand detailed clinical support without altering existing Medicare payment prerequisites, with submissions evaluated against established criteria to prevent overutilization. The Centers for Medicare & Medicaid Services (CMS) enforces these through initiatives launched in 2012, expanded to repetitive scheduled non-emergency services by 2020, where incomplete or inadequate records result in provisional affirmatives pending full review.^[16]^[25] Medicaid prior authorization documentation varies by state, often incorporating state-specific forms, prior peer consultations, or electronic health record excerpts to justify services beyond standard benefits, with federal oversight promoting uniformity in denial rationales and requirement disclosures. The Medicaid and CHIP Payment and Access Commission noted in 2024 that states impose prior authorization on high-cost items like durable medical equipment, requiring payers to publicize exact documentation needs, though implementation differs, leading to interstate disparities in submission burdens. CMS's 2024 rules further compel Medicaid managed care plans to disclose these requirements transparently, facilitating provider queries for precise criteria.^[22] Commercial payers, including major entities like UnitedHealthcare and Anthem, diverge markedly in documentation rigor, frequently mandating proprietary forms detailing drug dosages, failure of alternatives, and peer-to-peer physician discussions alongside lab results or imaging. Empirical comparisons across four large private insurers in 2025 identified reproducible yet payer-unique frameworks for rules on services like advanced imaging, where one might suffice with brief clinical summaries while another demands exhaustive longitudinal records, amplifying preparation time. These variations persist despite industry pledges for simplification, as evidenced by America's Health Insurance Plans' 2025 commitments to reduce low-value authorizations, which do not uniformly standardize documentation.^[26]^[27] To mitigate inconsistencies, the 2024 CMS Interoperability and Prior Authorization Final Rule requires applicable payers—including Medicare Advantage, Medicaid managed care, and certain Qualified Health Plans—to implement APIs by January 2027 enabling real-time queries of documentation requirements and decision timelines, alongside automated prior authorization submissions using FHIR standards. This provision, effective from 2026 for expedited decisions, targets reductions in manual variances by allowing pre-submission verification, though applicability excludes fee-for-service Medicare and state-specific Medicaid fee-for-service elements.^[28]^[29]

Intended Purposes and Empirical Benefits

Mechanisms for Cost Control and Utilization Management

Prior authorization functions as a prospective gatekeeping tool in utilization management, compelling providers to submit clinical evidence—such as patient history, diagnostic results, and proposed treatment rationale—for payer review prior to delivering specified services or medications. Payers evaluate submissions against standardized, evidence-based criteria, often drawn from clinical guidelines like those from the American College of Cardiology or drug compendia, to approve only interventions deemed medically necessary and cost-effective relative to alternatives.^[30]^[31] This preemptive scrutiny mitigates moral hazard, where insured individuals or providers might otherwise pursue higher-cost options without justification, thereby curbing volume-driven overutilization of services like elective surgeries, advanced imaging (e.g., MRI for low-back pain without red flags), or off-formulary pharmaceuticals.^[32] Key sub-mechanisms include step therapy protocols, which require documented failure of lower-cost or first-line treatments before authorizing pricier alternatives, such as generic statins preceding branded ones in lipid management. Quantity limits cap approved units—e.g., restricting opioids to a 7-day supply initially—to avert excessive dispensing and associated risks, while site-of-service rules steer care from high-overhead settings like hospitals to ambulatory clinics. These elements collectively compress demand for outlier expenditures; for example, PA on high-cost biologics has shifted utilization toward biosimilars, yielding per-claim savings of 20-30% in select Medicaid programs.^[5]^[22] In terms of cost control, PA targets avoidable spending by denying or modifying an estimated 10-20% of requests lacking sufficient evidence, reducing gross expenditures on non-essential care without uniformly increasing downstream utilization elsewhere. Empirical reviews document utilization drops of 15-25% for PA-affected services, such as outpatient behavioral health visits under managed care, translating to short-term per-enrollee cost moderation through lower inpatient admissions and procedure volumes.^[33]^[34] Analyses of Medicaid PA implementations, including those on long-acting injectables, confirm targeted spending reductions of up to 40% post-intervention, attributed to enforced adherence to least-cost effective pathways, though aggregate system-wide savings hinge on minimizing review overhead.^[22]^[35] By embedding causal checks—e.g., requiring proof of failed conservative management before invasive procedures—PA aligns reimbursements with probabilistic clinical value, deterring rote prescribing or testing patterns that inflate premiums. Longitudinal data from prior review programs, encompassing PA, reveal sustained curbs on high-cost outlier claims, fostering resource stewardship amid rising per-capita healthcare outlays exceeding $12,000 annually in the U.S. as of 2023.^[36]^[35]

Evidence from Studies on Cost Savings and Appropriate Care

Studies examining the impact of prior authorization (PA) on Medicare Part D drug spending from 2007 to 2015 found that PA requirements reduced prescription filling rates by 26.8% among low-income subsidy beneficiaries, leading to net program savings of $95.88 per beneficiary after accounting for administrative costs and substitution to alternative therapies.^[37] This analysis, based on comparisons between plans with and without PA restrictions, indicated that overall spending would rise by approximately 3% absent these controls, primarily through curbing access to higher-cost restricted drugs while half of affected patients substituted with equivalent options or forwent treatment entirely.^[38] A 2019 review of PA effects across service categories documented utilization reductions and associated cost savings in targeted areas, such as medical imaging where PA policies lowered MRI, CT, and cardiac imaging volumes without evidence of compromised access.^[33] For prescription drugs, PA on opioids in Pennsylvania Medicaid plans correlated with lower abuse and overdose rates compared to non-PA plans, while step therapy and PA for atypical antipsychotics and specialty medications yielded insurer cost decreases of 9-11% by shifting usage to lower-cost or preferred alternatives.^[33] Similarly, a Centers for Medicare & Medicaid Services demonstration for power mobility devices slashed monthly expenditures from $12 million to $3 million through PA enforcement, and non-emergency transport PA for end-stage renal disease beneficiaries cut quarterly trips by 2.5 and costs by $432 per person.^[33] These mechanisms support appropriate care by aligning prescriptions and procedures with medical necessity criteria, as PA promotes adherence to evidence-based guidelines and averts potential harms from off-label or excessive use, such as in opioid management where restrictions reduced diversion risks.^[5] ^[33] However, the reviewed evidence highlights that savings accrue mainly from denying or substituting non-essential services, with downstream health effects varying by intervention and requiring further causal evaluation beyond aggregate spending data.^[30]

Criticisms and Documented Harms

Delays, Denials, and Adverse Patient Outcomes

Prior authorization processes frequently result in treatment delays, with 93% of surveyed physicians reporting that such delays negatively affect patient care continuity.^[7] In one analysis of infusible medications, prior authorization was required for 71% of orders, contributing to median delays of several days to weeks before approval or denial resolution.^[39] These delays are attributed to documentation submission, review, and potential appeals, exacerbating conditions like cancer or chronic pain where timely intervention is critical.^[40] Denial rates vary by payer and service but remain significant initially. In Medicare Advantage plans, insurers processed nearly 50 million prior authorization requests in 2023, denying 6.4% fully or partially, though many denials (up to 57% in some claim analyses) are overturned on appeal.^[41] ^[42] For specific treatments like infused drugs, initial denial rates reached 21%, with appeals succeeding in 96% of cases but still imposing interim barriers.^[39] Physicians report that 82% of patients facing prior authorization abandon treatment due to the process's burden, leading to forgone care.^[7] These delays and denials correlate with adverse patient outcomes, including serious events reported by 29% of physicians, such as hospitalizations (23%), permanent impairments, and deaths.^[43] Overall, 94% of physicians in multiple surveys indicate prior authorization negatively impacts clinical outcomes, with evidence from oncology and rheumatology practices showing increased disease progression due to postponed therapies.^[44] ^[45] Consumer surveys corroborate this, finding individuals encountering prior authorization issues three times more likely to forgo needed medical treatment.^[46] While appeals mitigate some denials, the cumulative effect—evident in peer-reviewed analyses—includes heightened risks for vulnerable populations reliant on urgent or specialized care.^[47]

Administrative Burdens on Providers and Overall System Costs

Physicians and their staff dedicate an average of 13 hours per week to prior authorization tasks, including form completion, follow-ups, and peer-to-peer appeals, diverting time from direct patient care.^[48] Practices complete approximately 39 prior authorizations per physician weekly, with 39% employing staff exclusively for these administrative duties.^[48] This workload contributes to physician burnout, cited by 89% of surveyed physicians as significantly exacerbated by prior authorization requirements.^[48] Financial strains on providers arise from staffing, software, and opportunity costs associated with prior authorization compliance. Primary care practices incur annual costs ranging from $2,161 to $3,430 per full-time equivalent physician for prior authorization approvals alone, encompassing labor and process overhead.^[49] Manual prior authorization transactions cost providers $20 to $30 each, compounding expenses across high volumes.^[50] Larger systems may allocate billions in aggregate administrative spending to insurer-mandated processes, including prior authorization, which hospitals estimate at up to $40 billion yearly when factoring in related burdens.^[51] At the system level, prior authorization elevates overall healthcare expenditures through inefficient resource use and delayed care escalation. Eighty-eight percent of physicians report that prior authorization increases total health resource utilization, often via additional office visits (77%), emergency department encounters (47%), or hospitalizations (33%).^[48] Eighty-seven percent of surveyed physicians indicate it drives up system-wide costs, as administrative delays lead to more expensive interventions downstream, potentially offsetting any intended utilization controls.^[7] Empirical reviews, such as those from Altarum, note unresolved net economic impacts, with provider implementation costs and reduced care efficiency challenging claims of predominant savings.^[33] Nationally, administrative costs tied to prior authorization are estimated at $35 billion annually, underscoring its role in broader excess spending.^[52]

Stakeholder Debates and Controversies

Perspectives from Providers and Patients

Physicians report substantial administrative burdens from prior authorization, with practices completing an average of 45 requests per physician per week, consuming approximately 14 hours of staff time weekly.^[48] In a 2024 American Medical Association (AMA) survey of over 1,000 physicians, 93% indicated that prior authorization delays access to necessary care, while 89% linked it to increased burnout among providers.^[53] Additionally, 94% of respondents in the same survey reported negative impacts on patient clinical outcomes, including serious adverse events in 24% of cases where delays occurred.^[45] Providers often alter clinical decisions to circumvent prior authorization requirements, such as switching to alternative therapies, even when the preferred treatment aligns with evidence-based guidelines, as noted in a 2023 study where 75% of surveyed clinicians admitted to such adjustments to reduce burden.^[54] From the patient perspective, prior authorization frequently results in treatment delays and outright denials, exacerbating health issues. A 2025 KFF Health Tracking Poll found that 70% of adults view denials and delays as a major problem, with majorities across income groups agreeing that the process hinders timely care.^[55] In cancer care specifically, a July 2025 JAMA Network Open study of patient experiences revealed that prior authorization led to postponed diagnoses and therapies, with 21% of infused medication requests initially denied, potentially worsening prognoses through interrupted continuity.^[56] Physicians observing patient responses report that 78% of affected individuals abandon prescribed treatments due to exhaustion with appeals and paperwork, while 79% resort to out-of-pocket payments to bypass denials.^[40]^[10] These accounts highlight a shared frustration among patients and providers that prior authorization prioritizes insurer oversight over expeditious, clinically justified interventions.

Defenses from Insurers and Evidence of Necessity

Insurers maintain that prior authorization is indispensable for safeguarding against overutilization of high-cost services and medications, thereby containing premium increases and preserving the financial viability of health plans. By requiring pre-approval based on clinical criteria, payers argue it enforces medical necessity, discourages prescribing of unproven or off-label treatments, and steers patients toward evidence-based, cost-effective alternatives such as generics or lower-tier formulary drugs.^[57]^[30] This process, they contend, aligns with the contractual obligations of insurance to cover only appropriate care, mitigating moral hazard where providers might favor expensive interventions absent oversight.^[5] Empirical studies substantiate these defenses by demonstrating targeted reductions in wasteful spending and inappropriate utilization. For instance, a 2012 Medicare demonstration project on power mobility devices under prior authorization reduced monthly expenditures from $12 million to $3 million by curbing approvals for non-medically necessary items.^[33] Similarly, in non-emergent hyperbaric oxygen therapy from 2015 to 2018, the requirement yielded $5.33 million in savings over 13 months through stricter eligibility enforcement.^[33] For specialty drugs, combining prior authorization with step therapy achieved 9-11% cost reductions without broadly compromising access.^[33] Further evidence highlights improvements in care quality and safety. In Michigan Medicaid, prior authorization for hyperlipidemia drugs led to a 58% drop in non-preferred agent use, promoting adherence to guideline-preferred therapies.^[33] Opioid programs incorporating dosage limits and prior approval decreased usage and associated costs while lowering abuse and overdose rates, as seen in Pennsylvania Medicaid data linking the policy to reduced incidents.^[33]^[5] Pharmacy and therapeutics committees develop these criteria from peer-reviewed literature and clinical trials, ensuring alignment with FDA indications and minimizing risks like adverse interactions.^[30] Although aggregate health spending impacts remain mixed, these findings underscore prior authorization's role in averting avoidable expenditures on services lacking sufficient justification.^[33]

Reforms, Regulations, and Technological Advances

Legislative Initiatives at State and Federal Levels

At the federal level, the 119th Congress (2025-2026) has seen introduction of bills targeting prior authorization in Medicare programs. H.R. 2433, the Reducing Medically Unnecessary Delays in Care Act of 2025, mandates streamlined Medicare coverage decisions, including prior authorization requirements, to minimize delays in patient care.^[58] Similarly, H.R. 3514, the Improving Seniors' Timely Access to Care Act, establishes specific requirements for prior authorization use under Medicare Advantage plans, aiming to standardize processes and reduce administrative hurdles.^[59] This legislation, reintroduced in May 2025 with bipartisan support, builds on prior versions from 2024 and seeks to enforce timely approvals and appeals for beneficiaries.^[60] State legislatures have advanced prior authorization reforms more aggressively, with at least 43 states introducing substantive bills in 2025 alone.^[61] In 2024, ten states enacted laws to streamline processes, including mandates for faster insurer responses, greater transparency in denial reasons, and exemptions for routinely approved services: Vermont, Minnesota, Wyoming, Colorado, Illinois, Mississippi, Maine, Maryland, Oklahoma, and Virginia.^[62] For instance, Arkansas's HB 1301, passed in 2025, amends insurance regulations to impose stricter timelines on prior authorization decisions.^[63] Indiana's 2025 legislation requires insurers to respond to urgent prior authorization requests within 72 hours, addressing delays in time-sensitive care.^[64] Emerging state strategies include "gold card" programs, which exempt providers with high historical approval rates from routine prior authorizations, as implemented or proposed in multiple jurisdictions to reduce administrative burdens.^[63] These initiatives often focus on Medicaid and commercial insurance, with common provisions requiring decisions within 5-14 business days for standard requests and appeals processes with independent reviews, though enforcement varies by state.^[64] Overall, state reforms reflect a patchwork approach, prioritizing patient access and provider efficiency amid documented delays from prior authorization, while federal efforts lag in enactment.^[65]

Recent CMS Rules and Industry Pledges (2024-2025)

In January 2024, the Centers for Medicare & Medicaid Services (CMS) finalized the Interoperability and Prior Authorization Final Rule (CMS-0057-F), mandating that Medicare Advantage plans, Medicaid managed care plans, and Children's Health Insurance Program (CHIP) managed care entities implement application programming interfaces (APIs) for prior authorization processes by July 1, 2026, with Medicare fee-for-service and Part D following by January 1, 2027.^[66] The rule requires payers to decide standard prior authorization requests within 7 calendar days (down from 14) and expedited requests within 72 hours, while also compelling annual public reporting of metrics such as denial rates, approval timelines, and appeals data to promote transparency.^[66] These changes aim to reduce administrative delays through electronic data exchange using HL7 FHIR standards, though implementation challenges persist due to varying payer compliance capacities.^[67] In 2025, CMS advanced further reforms, including a July 1 announcement of a six-year model expanding prior authorization to select Medicare fee-for-service services prone to fraud, waste, and low-value care, such as certain durable medical equipment and non-emergency ambulance transports, to curb overutilization without broad mandates.^[68] For hospital outpatient department services under existing prior authorization programs, CMS shortened standard review timeframes to 7 calendar days effective November 14, 2024, aligning with the interoperability rule's emphasis on efficiency.^[16] The fiscal year 2026 inpatient prospective payment system final rule, released in August 2025, incorporated additional streamlining measures, such as phasing out manual processes in favor of automated systems for eligible cases.^[69] On June 23, 2025, over 50 health insurers, including the six largest publicly traded plans covering 257 million lives, pledged voluntary reforms under facilitation by the Department of Health and Human Services (HHS) and CMS, committing to six key actions: reducing services subject to prior authorization, accelerating decisions via automation, providing real-time responses for 80% of electronic requests by January 2027, enhancing provider portals with clinical decision support, standardizing data elements, and increasing transparency on denial rationales.^[70]^[27] The America’s Health Insurance Plans (AHIP) endorsed the pledge as a step toward simplifying processes, though critics including the American Medical Association noted historical non-fulfillment of similar insurer commitments, urging enforceable metrics over self-reported progress.^[71] These pledges remain non-binding, with implementation timelines extending into 2027, potentially overlapping with CMS interoperability deadlines but lacking federal oversight for private payers.^[72]

Role of Automation, AI, and Electronic Processing

Electronic processing of prior authorization requests has been mandated by the Centers for Medicare & Medicaid Services (CMS) through the Interoperability and Prior Authorization Final Rule (CMS-0057-F), finalized in January 2024, which requires impacted payers including Medicare Advantage organizations, Medicaid managed care plans, and certain state programs to implement Application Programming Interfaces (APIs) for submitting and processing requests electronically by July 1, 2026, for most payers and January 1, 2027, for Medicaid fee-for-service and CHIP.^[66] This rule aims to reduce administrative delays by enabling real-time data exchange and faster decision timelines, with payers required to respond to electronic requests within 72 hours for expedited cases and seven calendar days for standard ones, building on prior interoperability policies from 2020.^[28] Automation technologies, including rule-based systems and workflow software, have increasingly automated routine prior authorization tasks such as form population, eligibility verification, and follow-up communications, with studies indicating potential to handle up to 75% of manual processes in payer and provider workflows, thereby reducing processing times from weeks to days in implemented systems.^[73] In Medicaid programs, automation has grown since the early 2020s, with states adopting electronic platforms to standardize submissions and integrate clinical data, leading to reported efficiency gains like a 30-50% reduction in manual reviews for low-complexity requests, though adoption varies due to legacy system incompatibilities.^[74] Artificial intelligence (AI), particularly machine learning models, enhances automation by analyzing patient records, claims history, and clinical guidelines to predict approval likelihood and generate decisions, with some systems achieving real-time authorizations for standard procedures like imaging or medications.^[75] Proponents argue AI reduces administrative burdens by automating data matching to medical policies, potentially freeing provider staff for patient care, as evidenced by a 2024 industry analysis projecting cost savings of 20-40% in prior authorization operations through AI-driven digitization and predictive analytics.^[76] However, empirical data from physician surveys reveal concerns, with 61% of U.S. physicians in a 2025 American Medical Association poll expressing worry that insurer AI applications increase denial rates—sometimes up to 16-fold higher than manual reviews—potentially exacerbating delays and patient harms without sufficient transparency in algorithmic criteria.^[77] ^[53] Despite these risks, a 2025 national survey of providers indicated growing trust in AI for prior authorization, with over 70% viewing it positively for streamlining under new CMS standards, though implementation challenges persist, including data privacy under HIPAA and the need for auditable AI to mitigate bias in decision-making.^[78] CMS has emphasized risk management for AI in healthcare, requiring payers to document decision rationales in electronic responses to support appeals and oversight.^[79] Overall, while automation and AI promise causal efficiencies in reducing human error and volume overload, their net impact depends on rigorous validation against clinical outcomes, as unexamined black-box models risk prioritizing cost containment over evidence-based care.^[80]

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Jan 17, 2024 · These API policies will improve patient, provider, and payer access to interoperable patient data and reduce the burden of prior authorization processes.Missing: variations | Show results with:variations
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Prior Authorization and Utilization Management Concepts in ...
Prior authorization (PA) is a utilization management tool that enables plans to implement patient-focused goals of safe and appropriate medication use.
[31]
Utilization Management - StatPearls - NCBI Bookshelf - NIH
The prior authorization, or pre-auth, is done before a clinical intervention is delivered. The purpose of the pre-auth is to put a control in place designed to ...
[32]
Pharmaceutical demand response to utilization management
This paper considered the benefit of the increasingly common utilization management mechanisms, such as prior authorization, as a means for controlling moral ...
[33]
[PDF] IMPACTS OF PRIOR AUTHORIZATION ON HEALTH CARE COSTS ...
Prior authorization (PA) policies are used to varying degrees by both public and private payers to manage the use of costly or potentially avoidable care. ...
[34]
The Impact of Prior Authorization on Outpatient Utilization in ...
This study examines how preauthorization affects outpatient behavioral health utilization under managed care by comparing plans with similar benefits, ...<|separator|>
[35]
Impact of Prior Review Programs | Controlling Costs and Changing ...
Evidence on the net impact of second-opinion programs on utilization and costs is less supportive of the conclusion that it contains costs than is the (also ...
[36]
The Consequences and Future of Prior-Authorization Reform - NIH
Jul 27, 2023 · Prior authorization is one of the most enduring, infuriating, and effective tools in the United States for managing health care spending.
[37]
New Study Finds that Medicare's Prior Authorization Bureaucracy ...
Feb 8, 2023 · The researchers' model does suggest, however, that patients may value the foregone drugs less than the cost savings to plans. “While prior ...
[38]
https://zarekcb.github.io/PriorAuth_Web.pdf
[39]
Treatment Delays Associated with Prior Authorization for Infusible ...
We found that PAs are required in 71% of cases in which an infused medication is ordered and 21% of these are initially denied. Following appeals, 96% of all PA ...
[40]
Prior Authorizations and the Adverse Impact on Continuity of Care
Apr 2, 2025 · Prior authorizations result in 94% of patients experiencing delays in care and 78% abandoning treatment altogether. Prior authorizations create ...Missing: empirical | Show results with:empirical
[41]
Medicare Advantage Insurers Made Nearly 50 Million Prior ... - KFF
Jan 28, 2025 · The prior authorization process does not change any documentation requirements that are not already necessary for receiving Medicare payment ...
[42]
Medicare Advantage Denies 17 Percent Of Initial Claims
Jun 2, 2025 · Our study found claim denial rates of 17 percent as a share of initial claim submissions. We also found that 57 percent of all claim denials were ultimately ...
[43]
Physicians Worry That AI Increases Prior Authorization Denials
Mar 20, 2025 · Most physicians surveyed expressed concern that health insurance companies' use of artificial intelligence (AI) is increasing prior authorization denials.Missing: empirical | Show results with:empirical
[44]
Prior Authorization of Medication and Its Influence on Provider ...
Jul 29, 2025 · In the adjusted models, older providers were 18% more likely to be members of the High Denial PA class compared to the Problematic PA ...Lca Results · Table 2. Multinomial... · Distal Outcomes
[45]
AMA survey indicates prior authorization wreaks havoc on patient care
Jun 18, 2024 · Turmoil caused by excessive authorization controls leads to serious or life-threatening events for patients, unnecessary waste, and physician burnout.
[46]
Consumer Problems with Prior Authorization: Evidence from KFF ...
Sep 29, 2023 · However, people whose problems included prior authorization were far more likely to experience serious health and financial consequences ...<|control11|><|separator|>
[47]
The Impact of Prior Authorization on Clinical Practice and Patient ...
PAs can significantly affect patient care delivery and increase administrative burden to clinical practices, leading to serious adverse events in some ...Missing: empirical | Show results with:empirical<|separator|>
[48]
[PDF] 2024 AMA prior authorization physician survey
PA leads to substantial administrative burdens for physicians, taking time away from direct patient care, while costing practices money and significantly ...
[49]
Toolkit: Addressing the Administrative Burden of Prior Authorization
Feb 5, 2024 · Prior authorization is one of the most onerous administrative burdens that physicians ... administrative burden caused by prior authorization ...
[50]
Active steps to reduce administrative spending associated with ...
Prior authorization on approximately 5000 codes has an average cost of $40 to $50 per submission for private payers and $20 to $30 for providers. Interventions ...
[51]
Skyrocketing Hospital Administrative Costs, Burdensome ...
Sep 10, 2024 · A study by McKinsey found that hospitals and health systems are conservatively spending an estimated $40 billion annually on costs associated ...
[52]
Prior Authorization Statistics: The Impact of Prior Authorizations
Jul 25, 2024 · Increased administrative burden. Every procedure that requires prior authorization entails proper paperwork that must be completed, reviewed, ...<|separator|>
[53]
AMA Survey Highlights Growing Burden of Prior Authorization on ...
Feb 24, 2025 · Key Takeaways · PA's Impact on Patient Care, Physician Burnout, and Health Care Costs · Challenges in Reducing PA Burdens and the Role of AI.
[54]
Influence of prior authorization requirements on provider clinical ...
Conclusions: Respondents report that they may alter clinical decisions to avoid PA requirements and related burdens, even in cases in which use of the PA ...
[55]
KFF Health Tracking Poll: Public Finds Prior Authorization Process ...
Jul 25, 2025 · These individuals (69% of insured adults) report higher rates of prior authorization, delays, and denials of care. Six in ten (62%) insured ...Findings · Key Takeaways · Prior AuthorizationsMissing: empirical studies
[56]
Patient Perspectives on Prior Authorization for Cancer Care
Jul 29, 2025 · As such, prior authorization can delay diagnosis, treatment, symptom management, and continuity of care and potentially be harmful to patients ...
[57]
Examining Prior Authorization in Health Insurance - KFF
May 20, 2022 · This post explains what's known about how insurers use prior authorization as a tool to control costs and encourage cost-effective care, ...
[58]
H.R.2433 - 119th Congress (2025-2026): Reducing Medically ...
Reducing Medically Unnecessary Delays in Care Act of 2025. This bill requires Medicare coverage decisions, including prior authorization requirements and ...
[59]
H.R.3514 - 119th Congress (2025-2026): Improving Seniors' Timely ...
May 20, 2025 · To amend title XVIII of the Social Security Act to establish requirements with respect to the use of prior authorization under Medicare Advantage plans.
[60]
WHA-Backed Prior Authorization Reform Legislation Reintroduced
May 22, 2025 · A group of bipartisan legislators reintroduced the Improving Seniors' Timely Access to Care Act, legislation meant to curb prior authorization (PA) abuse in ...<|separator|>
[61]
State Legislators Target Prior Authorization - LexisNexis
Sep 30, 2025 · Lawmakers in at least 43 states introduced legislation dealing substantively with prior authorization this year, according to LexisNexis State ...
[62]
10 states have tackled prior authorization so far in 2024
Aug 19, 2024 · Vermont, Minnesota, Wyoming, Colorado, Illinois, Mississippi, Maine, Maryland, Oklahoma and Virginia passed prior authorization legislation this year.
[63]
Prior Authorization Reform Gains Momentum in States - MultiState
Aug 14, 2025 · Prior authorization reform is accelerating through multiple legislative strategies, including gold card programs that allow high-approval ...Missing: 2023-2025 | Show results with:2023-2025<|separator|>
[64]
States Lead on Prior Authorization Reform - ASCO
Jun 16, 2025 · State governments continue to pass legislation to mitigate the burdensome insurance practice that delays care and increases clinician burnout.Missing: 2023-2025 | Show results with:2023-2025
[65]
2024 Prior Authorization Reform - State and Federal Efforts - LUGPA
State-Level Reforms According to the American Medical Association, in 2024, at least 10 states passed laws aimed at reforming prior authorization processes.
[66]
CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F)
Sep 10, 2025 · This final rule also focuses on efforts to improve prior authorization processes through policies and technology, to help ensure that patients ...
[67]
Everything you need to know about prior authorization in 2025
Jul 31, 2025 · Prior authorization reduces waste from duplicative or unnecessary procedures, while helping to control premiums. Think of it as a guardrail ...
[68]
Medicare Program; Implementation of Prior Authorization for Select ...
Jul 1, 2025 · This notice announces a 6-year model focused on reducing fraud, waste (including low-value care), and abuse in Medicare fee-for-service (FFS)
[69]
Finalized regulations look to phase out manual prior authorization
Aug 6, 2025 · Medicare's FY26 final rule for hospital inpatient payments includes the latest federal effort to streamline and improve prior authorization.<|control11|><|separator|>
[70]
HHS Secretary Kennedy, CMS Administrator Oz Secure Industry ...
Jun 23, 2025 · Health insurers pledged six key reforms aimed at cutting red tape, accelerating care decisions, and enhancing transparency for patients and providers.Missing: 2024 | Show results with:2024
[71]
Action must follow pledges on prior authorization reform
Jul 7, 2025 · The latest pledge by health plans to reform the onerous prior authorization process must be followed by concrete action that fulfills those promises.
[72]
50+ insurers pledged to reform prior authorization. What's next?
Jun 25, 2025 · On Monday, over 50 health insurers pledged to standardize and reform prior authorization processes, both to reduce the burden on providers ...
[73]
AI ushers in next-gen prior authorization in healthcare - McKinsey
Apr 19, 2022 · AI-enabled PA can automate 50 to 75 percent of manual tasks, boosting efficiency, reducing costs, and freeing clinicians at both payers and providers to focus ...<|separator|>
[74]
Automation in the Prior Authorization Process - MACPAC
Recent years have seen growth in the use of technology, including artificial intelligence (AI), to automate parts of the Medicaid prior authorization process.
[75]
How AI is Revolutionizing Prior Authorization in Healthcare
Aug 26, 2025 · AI is revolutionizing prior authorization in healthcare by automating data submission, enhancing decision support, enabling real-time authorization, and ...
[76]
Unlocking The Potential Of AI In Prior Authorization - Oliver Wyman
There are three areas in particular that can have a sweeping impact: digitization, machine learning, and generative artificial intelligence.
[77]
Physicians concerned AI increases prior authorization denials
Feb 24, 2025 · Three in five physicians (61%) are concerned that health plans' use of AI is increasing prior authorization denials, exacerbating avoidable patient harms.Missing: electronic | Show results with:electronic
[78]
National Survey: Providers Trust AI for Prior Authorization
Oct 7, 2025 · A national survey of U.S. providers reveals growing trust in AI to improve prior authorization as new standards raise urgency for healthcare ...
[79]
[PDF] Automation in the Prior Authorization Process - MACPAC
Feb 28, 2025 · Prior authorization: the multi-step process by which health care payers require medical providers to receive approval before providing a.
[80]
Could an artificial intelligence approach to prior authorization be ...
Feb 21, 2023 · This article proposes an alternative that may be more human-centric, using artificial intelligence (AI) methods for the computation of authorization decisions.