How Prior Authorization Systems Work
Your doctor prescribes a medication, but the pharmacy says it requires prior authorization. Your surgeon schedules a procedure, then tells you insurance must approve it first. Days or weeks later, you may get approval, denial, or approval for something different. Prior authorization inserts a gatekeeper between your doctor's recommendation and your ability to receive care.
Prior authorization has become ubiquitous in American healthcare. Originally intended for expensive or potentially inappropriate treatments, it now covers common medications and routine procedures. The system affects millions of treatment decisions annually.
This article explains how prior authorization works, why it's expanded so dramatically, and what happens when authorization is denied.
What Prior Authorization Systems Are Meant to Do
Prior authorization requires insurers to approve certain treatments before they're provided. The stated purpose is ensuring treatments are medically necessary, appropriately used, and cost-effective. By reviewing before treatment, insurers can redirect care toward preferred alternatives or deny inappropriate requests.
From the insurer perspective, prior auth prevents unnecessary care and steers utilization toward less expensive options. When a generic medication works, requiring prior auth for the brand name encourages generic use. When physical therapy might help before surgery, prior auth can require trying it first.
The system also addresses safety concerns. Some treatments carry risks that warrant verification of appropriate indication and monitoring. Prior authorization can ensure that dangerous drugs are used appropriately.
How Prior Authorization Actually Works in Practice
Requirement identification: When your provider orders a treatment, their system checks whether prior auth is required. This depends on your specific insurance plan and the treatment ordered. Lists of prior auth requirements change frequently and vary between insurers.
Request submission: Your provider's staff submits the authorization request, including diagnosis, treatment requested, and clinical justification. Some insurers use electronic submission; others require faxes or phone calls. The documentation burden falls on providers.
Review process: Insurer staff review the request against clinical criteria. Initial review may be by nurses or pharmacists, with denials escalated to physician reviewers. The criteria used are often proprietary and not shared with providers or patients.
Decision communication: The insurer communicates approval, denial, or request for more information. Approvals may be for limited durations, requiring reauthorization. Denials include reasons and appeal rights, though reasons are often vague.
Appeals: Denied requests can be appealed, often through peer-to-peer review where your doctor speaks with the insurer's physician reviewer. Multiple appeal levels may be available, similar to claims appeals.
Why Prior Authorization Feels Burdensome or Harmful
Delays are common. Prior authorization takes days to weeks. During this time, patients wait for needed treatments. For urgent situations, delays can cause harm. Even non-urgent delays cause pain, anxiety, and disease progression.
Administrative burden is enormous. Physicians and staff spend hours weekly on prior auth requests and appeals. This time diverts from patient care. The cost of compliance is borne by providers but ultimately by patients through reduced access.
Denials happen even when treatment is appropriate. Prior auth denials don't always reflect clinical judgment. They may result from documentation technicalities, reviewer error, or overly rigid criteria. Doctors report frequent denials for clearly appropriate treatments.
Requirements change without notice. Drugs or procedures previously covered may suddenly require prior auth. Patients stable on medications may face disruption when authorizations expire or requirements change. The instability creates anxiety and interruptions.
The process is opaque. Patients often don't know prior auth is happening until something goes wrong. The criteria used for decisions aren't transparent. Denial reasons are vague. The system operates in a black box.
What People Misunderstand About Prior Authorization
Your doctor may not know what's required. Prior auth requirements vary by insurer and plan, and they change frequently. Providers can't memorize requirements for every plan they accept. Failures to obtain prior auth sometimes reflect system complexity more than provider negligence.
Prior auth isn't about whether you can afford it. Prior authorization is about insurance coverage, not your personal finances. Even if you're willing to pay out of pocket, prior auth affects whether insurance will pay. Different issues require different responses.
Approvals aren't permanent. Prior authorizations typically last for a defined period: one refill, one year, one course of treatment. Chronic conditions requiring ongoing treatment face repeated authorization requests. Prior auth burden doesn't end with the first approval.
Gold-carding exists but is limited. Some states require insurers to exempt providers with high approval rates from prior auth requirements. This "gold carding" reduces burden for established prescribing patterns but doesn't eliminate prior auth entirely.
Electronic prior auth is improving but not universal. Many prior auth requests still involve faxes, phone calls, and manual data entry. Electronic prior authorization standards exist and are being adopted, but implementation varies widely across insurers. Even electronic systems require dedicated staff time to submit requests, monitor status, and respond to additional information requests.
Prior authorization has grown from a targeted review mechanism into a pervasive friction point in healthcare access. While it serves legitimate purposes, the current implementation creates delays, denies appropriate care, and burdens the healthcare system. Understanding how prior auth works helps patients and providers navigate it while policy debates continue about reform.