Prior Authorization (PA) is an approval process for insurance coverage for certain services, treatments, and medications. There is some evidence that it can cut healthcare costs, but on balance, it seems to do more harm than good to both patient care and healthcare spending.
PA emerged in the 1960s in response to spiraling healthcare costs associated with the launch of Medicare and Medicaid. In the beginning, there was a relatively narrow set of treatments that required prior authorization, but over time the system grew and ultimately did not scale well. Today, healthcare providers are overrun with prior authorization paperwork, and every insurer has a completely different process and set of requirements.
There is some evidence that prior authorization can cut healthcare costs. Some studies have found reductions in utilization of high-priced drugs in favor of lower-cost alternatives with similar patient outcomes. But there’s also evidence that PA drives up costs. Prior authorization can increase rates of delaying or foregoing needed care, which often leads to more health spending (including catastrophic spending) down the line. A 2025 review of 25 studies found that PA is associated with delays in care, worse health, preventable hospitalizations, and prolonged inpatient stays. While delays in care due to PA occur in every field of medicine, some areas are more affected than others. In a 2023 KFF survey, 16% of adults with insurance reported experiencing a delay in care due to prior authorization. This share went up to 26% when the treatment sought was for a mental health condition.
All of that being said, we do miss something when we talk about prior authorization in terms of cost only. While it might have started as a cost containment measure, PA has become a key component of our current healthcare landscape, and we need to consider how it impacts other factors that affect the functioning of the healthcare system. For example, physicians report on average filling out 43 prior authorization requests per week, spending over 16 hours weekly. PA undoubtedly adds to the complexity of an already highly complex healthcare system, contributing to clinician burnout risk, which is already a major and escalating problem. In addition, we have to consider the fragile nature of many people’s relationship with the healthcare system to begin with. Trust in healthcare is historically low and signaling to patients that there are now even greater barriers to their access to healthcare is a good way to further alienate people.
On a more positive note, many politicians have taken notice of this problem and are implementing some interesting policy solutions at the state level. Some states have implemented rules that exempt certain providers with a specified rate of prior approvals from having to go through PA for certain services and drugs. Others have required shorter turnaround time for decisions from insurers. A few have prohibited PA for certain services like outpatient mental health or substance use disorder treatment. And other states have required insurers to honor PA requests approved under an enrollee’s prior health plan. With the increasing use of AI in insurance claims, regulation in this area is needed as well. Washington has a law that says that AI cannot be used to decline prior authorization requests without a health professional’s review.
What should you do if your PA request is denied but you still need treatment? First of all, you should ask your healthcare provider to help you with an appeal. This option is often underused, but it can be successful in many cases and may be worth the effort. In most cases, your doctor should ask for a peer-to-peer review, which means they discuss your case directly with a medical professional at the insurance company. The initial denial is often based on the insurance company’s formula for who meets criteria for the treatment to be covered, but your doctor can explain to another clinician why you might need it, even if you don’t technically meet those criteria. The appeal process can be slow, but you can ask for an expedited, 72-hour review if you can make a case that your situation is urgent. While you’re waiting, you can also look into coupons through companies like GoodRx, check if the drug maker has a patient assistance program through which you could get a discount, or find out if your doctor’s office has free samples from the drug company.
Once a potentially reasonable attempt to rein in healthcare costs, PA has now become a difficult policy problem and often a threat to both health and the functioning of the healthcare system. Cost containment is critically important but not at the expense of people’s physical, mental, or financial wellbeing. Some of the new policies states are putting in place are promising. Any future reform policies should follow the evidence on what actually works to contain costs without harming public health.
