Prior authorization (PA) is the process by which a physician or practice must obtain advance approval from an insurer before providing a specific service or procedure — failure to obtain it before the service date typically results in a claim denial that is difficult or impossible to overturn.
Prior authorization requirements are set by individual payers and vary by plan, service type, and diagnosis: most commercial insurers require PA for specialist referrals, advanced imaging (MRI, CT), high-cost medications, elective procedures, and durable medical equipment; Medicare Advantage plans have significantly expanded PA requirements relative to traditional Medicare. The PA process requires the practice to submit clinical documentation supporting medical necessity, await payer review (which can take 3–14 business days or be expedited for urgent cases), and receive written approval with an authorization number before the service is rendered. A prior authorization denial — when a service was performed without approved PA — is among the most difficult revenue cycle problems to resolve because payers typically cite the lack of pre-authorization as absolute grounds for non-payment, regardless of clinical appropriateness. Tracking prior authorization completion rates — the percentage of scheduled services requiring PA where authorization is confirmed before the service date — is a leading revenue cycle indicator; practices that monitor this metric weekly catch authorization gaps before services are rendered rather than after claims are denied. PA management is one of the highest administrative burden areas in medical practice operations and a frequent contributor to provider burnout and avoidable revenue loss.
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