Prior authorization (PA) is one of the most contentious processes in American healthcare. Doctors describe it as their biggest administrative burden. Patients experience it as an opaque gatekeeping system. A 2023 AMA survey found that 94% of physicians say prior authorization causes care delays, and 33% report it has led to serious adverse events for their patients. Yet insurers collected billions in administrative savings through PA in 2022 alone. Here's how it actually works, why denials happen, and what you can do about it.
What Is Prior Authorization?
Prior authorization (also called prior approval, pre-authorization, or pre-certification) is a process by which your health insurer requires your doctor to get approval before they prescribe a specific drug, perform a procedure, or refer you to a specialist. The insurer reviews the request against its clinical criteria and either approves it, denies it, or requests additional information.
PA requirements are set by each plan separately. The same medication might require prior auth under one plan but not another, even in the same employer's benefit package. PA requirements can change year-to-year without notice, meaning a drug you were taking without issue can suddenly require pre-approval at plan renewal.
How Many People Are Affected?
- According to AHIP (America's Health Insurance Plans), approximately 250 million prior authorization requests are submitted annually
- The AMA found that physicians submit an average of 45 PA requests per physician per week
- CMS data shows Medicare Advantage plans denied 1 in 8 PA requests in 2022
- Approximately 60% of Medicare Advantage PA denials were later overturned on appeal — suggesting many initial denials were inappropriate
Why Prior Authorization Gets Denied
Clinical Criteria Mismatches
Insurers use proprietary clinical criteria (Milliman MCG, InterQual, or their own guidelines) to evaluate PA requests. If your situation doesn't precisely match those criteria — even if your physician believes the treatment is appropriate — the PA will be denied. These criteria are not always consistent with current clinical guidelines from specialty societies, and they're updated on insurers' own timelines.
Step Therapy ("Fail First") Requirements
Many PA denials for medications require the patient to try a cheaper (usually older or generic) drug first and "fail" it before the preferred treatment will be approved. This is called step therapy. It can delay effective treatment by months while the patient tries medications their physician has already determined are unsuitable — often for documented reasons the insurer ignores.
Administrative Errors
A significant portion of PA denials are the result of administrative errors: missing documentation, wrong diagnosis code, the PA not being obtained at all due to provider oversight. These are often fixable without a formal appeal — just a corrected submission.
Reviewers Without Specialty Expertise
PA denials for specialty care are frequently made by reviewers who do not have specialty training in the relevant area. A cardiologist's request for a specific cardiac device reviewed by a general internist with no cardiology background is a systemic problem the AMA and specialty societies have documented extensively.
New federal rules are changing PA (CMS 2024)
CMS issued a final rule in January 2024 (effective 2026 for most payers) requiring Medicare Advantage, Medicaid, and CHIP plans to: decide standard PA requests within 7 calendar days, urgent PA requests within 72 hours, and provide specific reasons for denials. The rule also requires plans to use HL7 FHIR standards for PA data exchange. While this doesn't cover commercial employer plans, it represents the direction of regulatory pressure across the industry.
Your Rights When Prior Authorization Is Denied
- Right to a written denial with specific reasons — the insurer must tell you exactly why, including the clinical criteria applied
- Right to appeal the denial — same appeal rights as any other adverse benefit determination
- Right to an expedited appeal — 72-hour decision if your health is at risk
- Right to request the clinical criteria used — you can obtain the MCG or InterQual criteria used in the denial decision
- Step therapy override rights — many states have laws requiring insurers to grant step therapy exceptions when the patient has already tried and failed the required drug, when it's contraindicated, or when the physician certifies it's not clinically appropriate
How to Appeal a Prior Authorization Denial
PA denials follow the same appeal process as claim denials. Key steps:
- Request the clinical criteria immediately. You need the exact MCG or InterQual criteria to counter the denial.
- Have your physician document why those criteria are met. Line-by-line, addressed to the specific criteria points.
- Document step therapy failure if applicable. If you've already tried required alternatives, document the dates, doses, and why they failed or are contraindicated.
- Cite specialty society guidelines. If the denied treatment is recommended by a relevant specialty organization (NCCN, ACC, ADA, etc.), cite the specific guideline version and recommendation.
- Request peer-to-peer review. This is a call between your physician and the insurer's medical reviewer. Many PA denials are overturned at this stage — it's worth asking for before filing a formal appeal.
Peer-to-Peer Review: The Most Underused Option
Before filing a formal appeal, your physician can request a peer-to-peer review — a direct phone call with the insurer's medical reviewer. These calls are often the fastest and most effective way to overturn a PA denial. The insurer's reviewer may not be familiar with your specific case details, and a five-minute conversation with your treating physician who has the full clinical picture often resolves denials that would otherwise require weeks of formal appeals.
Ask your physician to request peer-to-peer review explicitly. Not all insurers volunteer this option.
State Prior Authorization Laws
| State | Step Therapy Override Law | Continuity of Care Protections |
|---|---|---|
| California | Yes (SB 1305) | Yes — 180 days |
| Texas | Yes (SB 680) | Yes |
| New York | Yes (2016) | Yes |
| Florida | Yes (HB 1175) | Limited |
| Federal (ERISA plans) | Generally no state law applies | ACA provisions only |
For our full guide on prior authorization appeals including detailed strategies by treatment type, see our prior authorization appeals guide. For help with the appeal letter, use our free letter generator.
Sources: AMA Prior Authorization Physician Survey 2023 · CMS Medicare Advantage Oversight data · AHIP Health Insurance Plan data · CMS Prior Authorization Final Rule (January 2024). Disclaimer: This article is for informational purposes only. Not legal or medical advice. Last updated: March 2026.