A patient needs an MRI. The physician has ordered the test, the clinical documentation is available, and the patient is ready to schedule. Then the practice discovers that the insurance plan requires prior authorization.
Now someone has to check the payer’s requirements, gather the necessary records, submit the request, monitor its status, and make sure the approval is still valid when the service takes place.
For a busy physician practice, that can quickly become more than a routine administrative task.
Prior authorization in medical billing is the process of obtaining approval from a health insurance payer before certain healthcare services, medications, procedures, or equipment are provided. The exact requirements vary by payer, plan, service, and patient.
For physicians and practice managers, the challenge is not simply getting an authorization approved. It is making sure the requirement is identified early, the right information is submitted, and the authorization details remain aligned with the service that is eventually billed.
This guide explains how prior authorization works, why insurance companies require it, which services commonly need approval, what causes authorization-related denials, and how medical practices can make the process easier to manage.
It also covers the CMS changes affecting prior authorization in 2026 and 2027 and what those changes may mean for physician practices.
What Is Prior Authorization?
Prior authorization is an advance review process used by some health insurance plans before they will cover certain medical services, medications, procedures, or equipment.
The physician’s office typically submits information about the patient and requested service, along with supporting clinical documentation. The payer reviews that information and makes a decision based on the patient’s plan and applicable coverage requirements.
The terminology and requirements can vary between insurance companies and plans, so practices should always verify the specific rules that apply to the patient.
Prior authorization happens before the claim is submitted, but it can have a direct impact on the revenue cycle.
For example, a claim may have accurate coding and complete documentation but still face an authorization-related denial if the payer required prior authorization and the requirement was not satisfied. Problems can also occur when an authorization has expired, applies to a different service, or does not match the provider or location involved.
That makes authorization more than another form to complete. It is a checkpoint connecting scheduling, clinical documentation, coding, claims, and reimbursement.
Why Do Insurance Companies Require Prior Authorization?
Health plans use prior authorization for different reasons, depending on the service and the terms of the patient’s coverage.
Common reasons include:
- Cost control: Some expensive services, medications, and procedures receive additional review before the payer agrees to cover them.
- Medical necessity: Payers may request clinical information demonstrating that a requested service meets their coverage criteria.
- Utilization management: Certain services may receive additional review based on the payer’s utilization policies.
From the practice’s perspective, the important issue is having a reliable process for identifying and completing these requirements.
When an authorization request is missed, delayed, or submitted with incomplete information, the result can be additional administrative work, delayed care, or a claim denial, depending on the payer’s rules.
Prior Authorization vs. Precertification vs. Predetermination
These terms are often used interchangeably in medical offices, but they can have different meanings depending on the payer.
Prior authorization generally refers to a health plan’s requirement for approval before a specific service, medication, or procedure is provided.
Precertification is commonly used for a similar advance-review process. HealthCare.gov includes “preauthorization” and “precertification” within its glossary definition of prior authorization.
Predetermination can be different. It may involve asking a payer to review a proposed service and provide information about potential coverage before treatment. Depending on the plan, a predetermination may not provide the same type of approval as a required prior authorization.
Because payer terminology varies, practices should check the patient’s specific plan requirements rather than relying on terminology alone.
The Prior Authorization Process, Step by Step
Every payer has its own procedures, but most authorization workflows follow a similar sequence.
| Step | What Happens | Usually Handled By |
|---|---|---|
| 1. Confirm the requirement | Check whether the patient’s specific plan requires authorization for the service, medication, or device | Insurance verification staff |
| 2. Collect documentation | Gather chart notes, test results, orders, and treatment history supporting the request | Clinical staff or physician |
| 3. Submit the request | Submit through the payer’s required portal, fax, phone, or electronic process | Billing or authorization coordinator |
| 4. Monitor the status | Track the request and respond to requests for additional information | Billing team |
| 5. Receive the decision | The payer may approve, deny, or request additional review or information | Payer, sometimes with physician input |
| 6. Act on the decision | Schedule the approved service or route a denial through the appropriate review or appeal process | Front office or denial-management team |
The process does not end when the request is submitted.
Someone needs to know whether the request is pending, whether additional documentation has been requested, whether the authorization has an expiration date, and whether the approval corresponds to the service that will actually be provided.
A simple tracking process can prevent staff from having to reconstruct the history of a request days or weeks later.
Which Services Most Often Require Authorization?
Not every healthcare service requires prior authorization.
Requirements vary by payer and plan, but authorization is commonly associated with services such as advanced imaging, certain medications, surgical procedures, durable medical equipment, behavioral health services, and selected diagnostic tests.
| Category | Common Examples |
|---|---|
| Advanced imaging | MRI, CT scans, PET scans |
| Specialty medications | Biologics, infusion therapy, specialty injectables |
| Surgical procedures | Elective surgery, orthopedic procedures, spine surgery |
| Durable medical equipment | Wheelchairs, CPAP machines, prosthetics |
| Behavioral health services | Inpatient psychiatric care, intensive outpatient programs |
| Diagnostic testing | Sleep studies, genetic testing, select cardiac tests |
Because payer policies differ, practices should verify the requirement for the patient’s specific plan and service instead of assuming that a procedure always does or does not need authorization.
For scheduling teams, checking early can be especially useful. Discovering an authorization requirement after an appointment has already been arranged leaves less time to resolve missing information.
The Real Cost of Prior Authorization for Physician Practices
Prior authorization can consume a significant amount of physician and staff time.
The American Medical Association’s survey of physicians found that practices complete an average of 39 prior authorization requests per physician each week, while physicians and their staff spend approximately 13 hours per week completing those requests. The same survey found that 40% of physicians have staff who work exclusively on prior authorizations.
The patient impact is another concern. The AMA’s survey reported that 78% of physicians said prior authorization often or sometimes results in patients abandoning a recommended course of treatment, while more than nine in 10 reported a negative effect on clinical outcomes.
For a practice, the administrative workload can include:
- Checking payer requirements
- Gathering clinical records
- Submitting authorization requests
- Monitoring pending requests
- Responding to payer questions
- Updating physicians and staff
- Communicating with patients
- Recording authorization numbers
- Tracking expiration dates
- Working authorization-related denials
All of these tasks require time.
That is why authorization management should fit into the practice’s wider revenue-cycle workflow rather than being treated as an isolated front-desk responsibility.
Related processes such as medical coding, charge entry, and accounts receivable management still have to be handled accurately after authorization is complete.
New CMS Rules Changing the Prior Authorization Process in 2026 and 2027
Prior authorization requirements are also changing at the federal level.
Under the CMS Interoperability and Prior Authorization Final Rule, certain impacted payers including Medicare Advantage organizations, Medicaid and CHIP managed care plans, and Qualified Health Plans offered through federally facilitated exchanges are subject to new requirements.
For applicable impacted payers, CMS established decision timeframes of 72 hours for expedited requests and seven calendar days for standard requests beginning in 2026. CMS also requires impacted payers to provide a specific reason for certain denied prior authorization requests. These requirements apply to medical items and services and do not apply to drugs under this particular rule.
CMS is also moving the industry toward more electronic prior authorization.
Beginning January 1, 2027, impacted payers must implement and maintain a Prior Authorization API capable of supporting prior authorization requests and responses, identifying documentation requirements, and communicating whether a request is approved, denied with a specific reason, or requires additional information.
For physician practices, the practical takeaway is that prior authorization is becoming more standardized and increasingly electronic.
However, practices should not assume that every payer, plan, or service will follow the same process immediately. Payer-specific requirements will continue to matter.
Top Reasons Authorization Requests Get Denied
An authorization denial can involve a medical-necessity or coverage issue, but many problems are also related to incomplete information or workflow errors.
| Denial Reason | How to Prevent It |
|---|---|
| Missing or expired authorization | Verify authorization status before the date of service |
| Incomplete clinical documentation | Submit the required notes, orders, test results, and treatment history |
| Mismatched CPT or diagnosis information | Compare the requested service with the information ultimately billed |
| Wrong provider or facility listed | Confirm that the provider and location match the authorization |
| Request submitted too late | Start the process early enough to allow for payer review |
| Service exceeds approved units or visits | Monitor approved quantities and request additional authorization when appropriate |
These problems can be frustrating because they often create work after the service has already been performed.
Instead of moving directly from a clean claim to payment, the practice may have to investigate the denial, review the authorization record, contact the payer, provide additional information, or pursue an appeal.
That is where a coordinated denial management process can help.
Best Practices to Reduce the Prior Authorization Burden
There is no single workflow that works perfectly for every practice. But a few consistent habits can make authorization much easier to manage.
1. Verify requirements early
Do not wait until the day before an appointment.
When a service is scheduled, determine whether the patient’s plan requires authorization and identify what information the payer needs.
2. Maintain payer-specific checklists
Two plans from the same insurance company may have different requirements.
A payer-specific checklist gives staff a reliable reference instead of forcing them to rely on memory.
3. Keep documentation organized
Clinical notes, orders, test results, and other supporting information should be easy for the responsible team member to access.
This reduces unnecessary delays when a payer requests additional documentation.
4. Track pending requests
Every request should have a status and an owner.
For example:
- Not started
- Submitted
- Pending
- Waiting for documentation
- Approved
- Denied
- Under review
- Ready for appeal
5. Monitor expiration dates
An authorization may have a defined effective period or a limit on approved visits or units.
Those details should be recorded and monitored.
6. Review authorization-related denials
A denial should not always be treated as a one-time problem.
If the same payer, service, or procedure repeatedly produces authorization-related denials, review the workflow behind those claims.
The problem may be the timing of the request, incorrect information, missing documentation, or a misunderstanding of the payer’s requirements.
Fixing the underlying process can prevent the same issue from appearing again.
Prior Authorization and Medical Necessity
Medical necessity is an important consideration in many authorization decisions.
Payers may request documentation showing why the requested service is appropriate based on the patient’s condition and the plan’s coverage requirements.
For physicians, the clinical record should accurately describe the patient’s condition, evaluation, and treatment plan.
The authorization or billing team can then use the appropriate documentation when submitting the request.
The goal should be accurate documentation not documentation created simply to satisfy a payer requirement.
When clinical documentation and coding accurately reflect the care provided, they can support both the authorization process and the subsequent claim.
Prior Authorization for Different Medical Specialties
Authorization requirements are not the same across specialties.
Practices that perform procedures, order advanced diagnostic testing, prescribe specialty medications, or provide services subject to utilization management may encounter authorization more frequently.
Orthopedics
Orthopedic practices may deal with authorization for surgery, advanced imaging, injections, physical therapy, durable medical equipment, and other services.
orthopedic billing services include areas such as eligibility verification, prior authorization, coding, claims, denial management, and A/R follow-up.
Cardiology
Cardiology practices may encounter authorization requirements related to diagnostic testing, cardiac imaging, procedures, and certain treatments.
Dermatology
Dermatology practices may need authorization for selected medications, biologic therapies, procedures, and treatments depending on the patient’s plan.
Wound Care
Wound-care practices can encounter authorization and documentation requirements related to treatments, procedures, supplies, and medical necessity.
Ambulatory Surgery Centers
ASCs may need to coordinate authorization details across the patient, payer, physician, facility, procedure, and scheduled date of service.
The details vary, but the basic principle remains the same: the authorization information should correspond accurately to the service being provided.
How to Improve Your Authorization Workflow
Improving prior authorization in medical billing does not necessarily require a complicated technology overhaul.
Start by making responsibilities clear.
A practice should know:
- Who checks the authorization requirement
- Who gathers supporting records
- Who submits the request
- Who follows up
- Who records the approval
- Who verifies authorization before the service
- Who handles a denial
A centralized tracker can also give the team a simple view of outstanding work.
For example:
Patient → Payer → Service → Submission Date → Status → Authorization Number → Effective Date → Expiration Date → Approved Units → Next Follow-Up
That information makes it easier to see what is happening with each request and who needs to take the next action.
Technology can also help as practices grow, particularly when they manage multiple providers, specialties, locations, or payer contracts. But technology works best when the underlying workflow is already defined.
Metrics Worth Monitoring
Tracking a few key measurements can help a practice identify where its authorization process needs attention.
| Metric | What It Tells You |
|---|---|
| Authorization approval rate | How frequently requests receive approval |
| First-pass approval rate | How often requests are approved without additional correction |
| Authorization-related denial rate | How frequently authorization contributes to claim problems |
| Average turnaround time | How long requests take to receive a decision |
| Pending authorization volume | How much authorization work is currently outstanding |
| Appeal success rate | How often denied requests are overturned after review |
These metrics become more useful when reviewed by payer, specialty, service, and denial reason.
For example, if one payer consistently takes longer to respond, staff may need to submit those requests earlier. If one procedure repeatedly generates denials, the practice can review the authorization and documentation workflow for that service.
What Is Changing in Prior Authorization?
Prior authorization is likely to remain an important administrative issue for healthcare providers, but the process is moving toward greater standardization and electronic exchange.
CMS’s current requirements are intended to improve transparency and make certain prior authorization processes more efficient. The move toward electronic APIs is particularly important because it may reduce dependence on manual processes for applicable plans.
At the same time, physician practices should not assume that every payer or every service will immediately operate the same way.
Payer-specific policies still matter.
The practical approach is to keep checking current payer requirements, maintain accurate authorization records, and make sure staff understand how changes affect the services they handle.
Should Physicians Outsource Prior Authorization?
Some practices manage authorization successfully with an internal team.
Others find that the workload becomes difficult to maintain as patient volume, specialty services, and payer requirements increase.
Outsourcing may be worth evaluating when:
- Staff spend a significant amount of time on authorization requests
- Follow-ups are frequently missed
- Authorization-related denials are increasing
- The practice has several specialties or locations
- Payer requirements are difficult to monitor
- Administrative work is taking physicians or clinical staff away from patient care
- The practice does not have enough internal staff to manage the workload consistently
The decision should be based on the practice’s actual volume, payer mix, staffing, and revenue-cycle performance.
A billing partner can be particularly useful when authorization needs to connect with other parts of the revenue cycle.
Right Billing Solutions provides revenue cycle management services that include medical billing, coding, denial management, A/R, payment posting, credentialing, and related revenue-cycle functions.
That broader approach matters because authorization does not exist in isolation.
A request can be approved and still require accurate coding, clean claim submission, payment posting, and A/R follow-up before the practice receives reimbursement.
For practices considering outside support, a revenue audit can help identify where authorization and other revenue-cycle issues may be affecting collections.
How Prior Authorization Fits Into Revenue Cycle Management
Revenue cycle management starts well before a claim reaches the payer.
Eligibility verification, authorization, documentation, coding, charge entry, claim submission, payment posting, denial management, and A/R follow-up are all connected.
A problem at one stage can create additional work at another.
For example:
Missed authorization → Claim denial → Rework → Delayed reimbursement → Higher A/R
A more organized workflow looks like:
Eligibility → Authorization → Documentation → Coding → Clean Claim → Payment → A/R Monitoring
This is why prior authorization in medical billing should be considered part of the broader revenue cycle rather than a standalone administrative task.
When authorization information is accurate and available to the billing team, it becomes easier to identify problems before they turn into avoidable claim issues.
How Right Billing Solutions Can Support Your Revenue Cycle
Managing authorization is only one part of keeping a medical practice’s revenue cycle moving.
Right Billing Solutions offers medical billing, medical coding, denial management, credentialing, payment posting, A/R recovery, and other revenue-cycle services.
For practices dealing with authorization-related delays or denials, the value of a billing partner is not simply having another person submit forms. The larger benefit is having authorization connected to the rest of the billing workflow.
That means an authorization issue can be identified alongside coding, claims, denials, and A/R rather than being handled as an isolated administrative problem.
Conclusion
Prior authorization can be one of the more time-consuming administrative responsibilities in a medical practice, particularly for specialties that regularly deal with procedures, advanced imaging, specialty medications, or other services subject to payer review.
The most effective approach is proactive.
Check the patient’s plan early. Confirm whether authorization is required. Gather the appropriate documentation. Submit the request through the payer’s required channel. Track the status, approval number, effective dates, and approved services. Before the claim goes out, make sure the billed service aligns with the authorization when authorization was required.
When denials occur, don’t look only at the individual claim. Look for patterns.If the same payer, service, or procedure repeatedly creates authorization problems, the issue may be in the workflow rather than the individual claim.Practices that keep their workflows organized, monitor payer requirements, and give someone clear responsibility for authorization are better positioned to manage these changes.
Whether authorization is handled internally or with support from a revenue-cycle partner, the objective is the same: reduce avoidable administrative work, prevent unnecessary billing problems, and help your practice receive appropriate reimbursement for the care it provides.
If authorization-related delays or denials are creating problems for your practice, contact our team to discuss where your revenue cycle may be losing time or revenue.
FAQs
1. What is prior authorization in medical billing?
Prior authorization in medical billing is a payer requirement for advance review and approval of certain services, medications, procedures, or equipment. Requirements vary by health plan.
2. Who is responsible for obtaining prior authorization?
Responsibility varies by practice and payer. The physician’s office, clinical team, scheduling staff, or billing and authorization team may handle the process.
3. How long does prior authorization take?
Processing time varies by payer and request type. For certain impacted payers, CMS requires decisions within specific timeframes for applicable medical items and services.
4. What happens if a service is performed without authorization?
If authorization was required and the requirement was not met, the claim may be denied or payment may be affected. Whether retroactive authorization is possible depends on the payer and circumstances.
5. Which medical specialties commonly deal with prior authorization?
Specialties involving advanced imaging, procedures, specialty medications, and other utilization-managed services may encounter authorization frequently. Orthopedics, cardiology, dermatology, and wound care are examples.
6. Can a denied authorization request be appealed?
In many situations, a payer provides a reconsideration or appeal process. The appropriate response depends on the denial reason and the payer’s rules.
7. Does prior authorization guarantee payment?
No. Authorization does not necessarily guarantee claim payment. The claim may still need to satisfy eligibility, coverage, coding, documentation, medical-necessity, and other payer requirements.
8. Does prior authorization apply to Medicare and Medicaid?
Certain Medicare Advantage and Medicaid and CHIP managed-care plans are subject to federal prior-authorization requirements. However, requirements still vary by plan and service.
9. How can a medical practice reduce authorization-related denials?
Start by verifying requirements early, submitting complete documentation, accurately recording authorization details, monitoring expiration dates, and reviewing recurring denial patterns.
10. Should a small medical practice outsource prior authorization?
It depends on the practice’s authorization volume, payer mix, staffing, and specialty services. Outsourcing may be worth evaluating when authorization work consistently consumes significant staff time or contributes to revenue-cycle problems.
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