Mississippi Anesthesia Professionals

Prior Authorization in US Healthcare

In the US healthcare system, prior authorization (PA) is a critical process that affects providers, insurers, and patients. Also known as “pre-approval” and “pre-certification,” PA was developed in the 1960s to reduce healthcare costs and ensure patient safety by restricting access to novel or expensive treatments to patients whose options were otherwise exhausted (1). However, PA has since become a standard stipulation required by insurers to determine coverage eligibility for hundreds of treatments, including conventional medications and procedures (2). Despite its origin as a cost-reducer and safety-securer, PA has become an increasingly contentious issue due to its administrative burden, treatment delays, and effect on patient care (3).

To begin the PA process, providers submit a request to their patient’s insurer before initiating a planned course of treatment (4). In their request, they provide information about the treatment—ranging from medications to surgeries to devices—along with supplemental documentation—such as progress notes, imaging, and laboratory results—to justify the use of the treatment (4). Insurers then review the request and determine whether to cover the cost or to deny the claim and instead suggest an alternative, less expensive treatment (4, 5). For example, if a provider requests PA for a medication, the insurer may deny the claim if less expensive drugs exist, if the medication is deemed “inappropriate” for the patient by the insurer, or if the insurer believes the patient’s pre-existing medications could react poorly with the proposed treatment (4, 6). To contest rejections, providers can begin the appeal process, a tiered approach that typically begins with the provider discussing the request with the insurer’s medical reviewer, then moving the claim to a different reviewer if the claim was denied again, and finally, initiating an independent review (4).

The prior authorization request and appeals process has significant consequences for the providers and their patients and has drawn criticism from several groups of stakeholders within US healthcare. On the provider’s side, the steps of compiling documentation, complying with each insurer’s specific regulations, and requesting appeals incurs an administrative burden, which has been named as a leading cause of physician burnout (7). Additionally, critics of PA argue that the process diminishes the time providers can spend with patients and reduces their autonomy, as they can no longer always treat patients as they see fit (8). According to a provider survey, only 15% believed that insurer PA criteria were “often or always evidence-based,” a statistic that points to providers’ growing dissatisfaction with the clinical validity of insurers’ decision-making processes (3).

On the patient’s side, every step in the process extends the time they are left waiting for treatment, which may negatively impact their health and financial status, especially in cases of denials and appeals (3). Approximately one-third of surveyed physicians reported that PA delays or denials led to a serious adverse event for a patient in their care (9). In many instances of denied claims, a patient must try and fail alternative treatments before their insurer will authorize the more expensive yet more effective treatment that was initially requested — a situation that occurs up to 64% of the time, according to providers (3).

Although the prior authorization process has suffered a declining reputation due to these negative effects, US healthcare data have shown that patient spending would be roughly 3% higher without prior authorization, which demonstrates the cost reduction that PA promises (10). However, the same data have also indicated that only half of patients whose claims were denied actually use the alternative recommended by the insurer — instead, they result in no treatment at all (10).

In the wake of rising healthcare costs in the US and growing dissatisfaction with prior authorization, many providers have advocated for changes to the process (3, 4, 7). As a result, in early 2024, the Biden administration announced a new rule that requires insurers to expedite the PA process and include specific reasons for denying claims (11). While the increased speed and transparency of PA would help many patients and providers, the process may require additional reform to continue limiting costs while also protecting providers’ well-being and patients’ health.


1: Yang, Q. and Parker, K. 2023. “Here’s what to do when your health insurance requires prior authorization for a treatment.” The State Journal-Register. URL: https://www.sj-r.com/story/lifestyle/columns/2023/01/30/what-to-do-when-your-health-insurance-requires-prior-authorization/69850123007/.

2: Schwartz, A., Brennan, T., Verbrugge, D., and Newhouse, J. 2021. Measuring the scope of prior authorization policies. JAMA Health Forum, vol. 2(5). DOI: 10.1001/jamahealthforum.2021.0859.

3: American Medical Association. 2023. 2022 AMA prior authorization (PA) physician survey. American Medical Association. URL: https://www.ama-assn.org/system/files/prior-authorization-survey.pdf.

4: Berg, S. 2023. “What doctors wish patients knew about prior authorization.” American Medical Association. URL: https://www.ama-assn.org/practice-management/prior-authorization/what-doctors-wish-patients-knew-about-prior-authorization.

5: Pestaina, K. and Pollitz, K. 2022. “Examining prior authorization in health insurance.” KFF. URL: https://www.kff.org/policy-watch/examining-prior-authorization-in-health-insurance/.

6: Pearson, S., Lowe, M., Towse, A., Segel, C. and Henshall, C. 2020. Cornerstones of “fair” drug coverage: appropriate cost-sharing and utilization management policies for pharmaceuticals. Institute for Clinical and Economic Review. URL: https://icer.org/wp-content/uploads/2020/11/Cornerstones-of-Fair-Drug-Coverage-_-September-28-2020-corrections-1-5-21.pdf.

7: American College of Physicians. 2024. Toolkit: addressing the administrative burden of prior authorization. American College of Physicians. URL: https://www.acponline.org/advocacy/state-health-policy/toolkit-addressing-the-administrative-burden-of-prior-authorization.

8: Loria, K. 2019. “The impact of prior authorizations.” Medical Economics, vol. 96(5). URL: https://www.medicaleconomics.com/view/impact-prior-authorizations.

9: O’Reilly, K. 2023. “1 in 3 doctors has seen prior auth lead to serious adverse event.” American Medical Association. URL: https://www.ama-assn.org/practice-management/prior-authorization/1-3-doctors-has-seen-prior-auth-lead-serious-adverse-event.

10: Wallace, C. 2023. “Does prior authorization really reduce costs?” Becker’s ASC Review. URL: https://www.beckersasc.com/asc-coding-billing-and-collections/does-prior-authorization-actually-reduce-costs.html.

11: Centers for Medicare and Medicaid Services. “CMS finalizes rule to expand access to health information and improve the prior authorization process.” CMS Newsroom. URL: https://www.cms.gov/newsroom/press-releases/cms-finalizes-rule-expand-access-health-information-and-improve-prior-authorization-process.