What is Prior Authorization?
Prior authorization (PA) is a utilization management requirement where health insurance companies mandate that prescribers obtain preapproval before a medication, procedure, or service will be covered by the plan. 1
Core Purpose and Function
Prior authorization serves as a cost-containment strategy used by health insurers to control service delivery, payments, and reimbursements of health interventions. 2 The original stated intent was to ensure high-quality standards in treatment delivery while encouraging evidence-based and cost-effective therapeutic choices. 2
The process requires prescribers to submit clinical documentation demonstrating medical necessity before the insurance plan will authorize coverage. 1 This typically includes:
- Patient diagnosis and condition details 1
- Relevant clinical measurements with source documentation 1
- Previous therapies used and rationale for the requested treatment 1
- Documentation addressing known contraindications and steps to minimize risks 1
- Evidence that delays in therapy may cause harm to the patient 1
How It Works in Practice
Health plans and employers pay pharmacy benefit managers (PBMs) administrative fees for utilization management services, including processing prior authorization requests. 1 The required information varies depending on the payer and state. 1
Prior authorization is commonly required for expensive medications (including infused biologics and newer therapies), certain procedures, and advanced diagnostics. 1, 3 For example, newer heart failure medications often require PA before coverage is approved, which serves as a significant barrier to guideline-directed medical therapy. 1
Administrative Burden and Delays
The PA process creates substantial administrative burden for healthcare teams, often requiring dedicated non-physician staff members (usually nurses or pharmacists) solely to navigate the considerable time required for authorizations. 1 This coordination of expertise is often only financially feasible in larger academic practices or integrated health systems, whereas smaller practices struggle with hours of uncompensated staff time. 1
PA requirements are associated with significant treatment delays. 4 In one study of infusible medications for rheumatologic conditions, PAs were associated with a median of 31 days to infusion compared to 27 days when no authorization was required. 4 When PAs were initially denied, the delay extended to a median of 50 days. 4
Impact on Patient Outcomes
PA delays can limit patient access to appropriate medical interventions, potentially compromising quality of care and patient outcomes. 5 For time-sensitive procedures, delays beyond 8 weeks may negatively impact patient-important outcomes. 5
Patients denied coverage are commonly forced to receive second-choice options, including less effective or less tolerable alternatives, or are exposed to financial toxicity from substantial out-of-pocket expenditures. 2 In diabetes care, patients who did not receive their requested medication following PA had significantly smaller reductions in hemoglobin A1c (-0.4%) compared to those who received the requested medication (-0.9%) or an alternative (-1.0%). 6
PA denials are associated with greater glucocorticoid exposure in rheumatologic conditions—patients with denied PAs had median glucocorticoid exposure of 605 mg compared to 160 mg when PA was not required. 4
Approval Rates and Efficiency
Despite the administrative burden and delays, the vast majority of PA requests are ultimately approved. 4 In one study, 96% of all PAs were eventually approved, with 82% of initially denied requests later approved. 4 In congenital and pediatric cardiology, PAs are rarely denied despite significant administrative burden and care delays. 3
Electronic PA (ePA) implementation can reduce processing time substantially—from a median of 18.7 hours to 5.7 hours from request to decision. 7
Equity Concerns
PA processes disproportionately affect vulnerable populations and exacerbate health disparities. 1, 6 Federal parity laws require that prior authorization for mental health and substance use disorder benefits be similar to medical and surgical benefits, yet violations persist. 1
PA is often required for mental health and substance use emergency services but not for analogous medical or surgical hospitalization events. 1 Patients who are Hispanic/Latino, have non-integrated system prescribers, and have higher burden of chronic disease are more likely to not receive their requested diabetes medication following PA. 6
Navigating the Process
Working with pharmacists, social workers, or patient navigators can help identify and navigate patient assistance programs and address PA requirements. 1 All steps taken in the PA process should be documented in the patient's health record, and providers should not hesitate to appeal decisions contrary to best patient care. 1
Standard requests through patient assistance programs typically allow for 90-day supplies with 3 refills to provide coverage for 1 year, though income verification and reordering procedures remain challenging. 1