Inside the prior authorization crisis: Adding costs to practices and delaying care for patients

For physicians, few administrative tasks provoke as much frustration as prior authorization. What was once a narrow utilization tool has become a dominant source of paperwork, delays, and patient dissatisfaction. Surveys from Medical Economics, the American Medical Association (AMA) and others consistently show that prior authorization (PA) is among the top barriers to timely care and one of the biggest drivers of burnout among physicians and staff.

In this FAQ, Medical Economics answers some of the most frequently searched and hot-button questions about prior authorization, from why payers require it to how practices can mitigate its impact on both patients and their bottom line.

What exactly is prior authorization and why do payers require it?

Prior authorization is a utilization-management process that requires physicians to obtain payer approval before providing certain tests, medications, or procedures. Insurers say it ensures services are medically necessary and cost-effective. The UnitedHealthcare website notes that prior authorization helps “confirm that care is medically appropriate” and “helps control costs for everyone.”

While intended to prevent overuse of low-value care, it has expanded dramatically across specialties. For physicians, that means added administrative steps before care can proceed — and for patients, it can mean waiting days or weeks for coverage approval, according to the AMA.

How big is the burden of prior authorization on physician practices?

Many physicians consider prior authorizations to be one of the top business and administrative challenges they face on a daily basis.

Kevin Schulman, MD, MBA, an internal medicine physician and professor of medicine at Stanford University, explains in this video for Medical Economics why prior authorization doesn't make sense when you get down to it, and why U.S. health care is making things more complicated than they need to be in health care administration. Give the clip below a watch, and jump to 50 seconds in for his take on prior authorization:

Publicly available data tells the story on prior authorization too:

• Physicians handle 39 to 45 requests per week on average, according to data from the AMA and Surescripts.
• Their staff spends about 13 hours weekly on PA-related tasks.
• Nearly two full business days per week are consumed by the process.
• 95% of physicians say prior authorization contributes to burnout, the AMA found.

Those hours translate into lost revenue and productivity. An analysis from ReferralMD estimated that practices spend roughly $68,000 per physician per year on interactions with health plans, including authorizations.

What are the biggest challenges practices face when managing prior authorizations?

Common pain points include:

• Inconsistent criteria: Each insurer maintains different, often shifting, approval rules.
• Manual processes: Many authorizations still rely on phone and fax rather than electronic systems, according to a National Library of Medicine study.
• Incomplete documentation: Missing CPT codes or inadequate proof of medical necessity commonly trigger denials, according to the the Accreditation Council for Medical Affairs' Prior Auth Training Institute.
• High administrative overhead: The process drains staff time away from patient care.
• Opaque payer communication: Practices often struggle to obtain clear denial reasons or timely updates, and every payer has different guidance. You can’t run a practice efficiently if every insurer is playing by different rules.

How does prior authorization affect patient care and outcomes?

Delays and denials don’t just inconvenience patients — they can alter the course of treatment.

According to a 2023 AMA survey:

• 94% of physicians said prior authorization delays access to necessary care.
• 78% said patients sometimes abandon treatment because of authorization hurdles.
• 19% reported a serious adverse event tied to delayed approval, including hospitalization or permanent impairment.

Physicians also note that payers’ clinical criteria often lag behind evidence-based medicine. In specialties such as oncology and behavioral health, those delays can be devastating. As Medical Economics previously reported in “How prior authorization hurts patient care”, deferred treatments frequently increase downstream costs as diseases progress untreated.

How does prior authorization affect patients?

From the patient’s perspective, prior authorization can be confusing, stressful, and even dangerous.

• Delays in treatment can worsen outcomes for chronic conditions, according to the AMA.
• Treatment abandonment occurs when patients give up after multiple denials or long waits.
• Trust erosion follows when patients see their doctor’s judgment overruled by insurers.
• Health disparities widen when patients with lower literacy or limited digital access struggle to navigate complex paperwork.

Multiple studies have found that patients who faced repeated administrative barriers were less likely to adhere to treatment and more likely to lose confidence in their health system, and even their physician.

What can practices do to streamline prior authorization work?

Effective management requires both workflow redesign and technology adoption:

1. Create a dedicated PA workflow: Assign specific staff to manage requests, appeals, and tracking.
2. Use EHR integration: Embed payer criteria into templates so requests are complete from the start.
3. Maintain a payer matrix: Keep a chart of which services and drugs trigger PA for each insurer.
4. Adopt electronic prior authorization (ePA): The health-tech firm CoverMyMeds reports that digital tools can cut turnaround times and reduce fax volume.
5. Monitor metrics: Track turnaround times, denial rates, and appeals to pinpoint bottlenecks.
6. Train clinicians and staff: Ongoing education helps ensure compliance and efficiency.
7. Engage payers directly: The AMA reports that some large groups have negotiated reduced PA requirements for low-risk, evidence-based services.

What’s next for reforming prior authorization?

Momentum for reform is building at both federal and state levels.

CMS finalized rules in 2024 that require faster electronic response times and more transparency from insurers. Meanwhile, state legislatures are passing laws that mandate uniform PA forms, set time limits for decisions, or require automatic renewals for chronic conditions, according to an Associated Press report.

Several large insurers, including UnitedHealthcare and Cigna, have pledged to simplify or eliminate PA for certain services. Professional organizations such as the AMA, AAFP, and MGMA continue to advocate for comprehensive federal legislation that standardizes and automates the process nationwide.

Still, the administrative burden won’t vanish overnight. Practices that proactively optimize their workflows and adopt ePA technology will be best positioned as reforms take hold.

What about AI? Can it solve the prior authorization problem?

AI could significantly reduce the administrative burden of prior authorization, but experts say it’s no silver bullet.

AI-powered tools are increasingly being integrated into electronic health records (EHRs) and payer portals to automate repetitive tasks such as verifying coverage, identifying whether a service requires authorization, and compiling the correct documentation. These systems can pre-populate forms, flag missing clinical data, and even predict whether a request will be approved, according to a Medical Economics article on AI and prior authorization.

Companies including Optum, Epic, and several revenue-cycle vendors are already deploying AI models to streamline decision making and speed up approvals. A 2024 report from CMS encouraged the adoption of electronic prior authorization (ePA) tools that incorporate machine learning to standardize data exchange and reduce manual reviews.

However, physicians remain cautious. The AMA warns that automation should “augment, not replace, clinical judgment,” emphasizing that AI systems must be transparent, auditable, and aligned with medical evidence. In other words, automation can make the process faster — but it cannot resolve disagreements over what insurers consider “medically necessary.”

The most likely near-term benefit, experts say, is efficiency. AI can shorten turnaround times, reduce staff workload, and flag denials for appeal faster. Over time, if regulators and payers standardize how AI tools exchange data, the technology could help restore the balance between cost control and timely patient care.

As Medical Economics noted in its feature “Prior authorization: How it evolved, why it burdens physicians and patients, and the promise of AI”, the best outcome may be one where AI doesn’t replace human reviewers — it simply gets them out of the way sooner.