Examining Prior Authorization in Health Insurance

Long used as a tool to control spending and to promote cost-effective care, prior authorization in health insurance is in the spotlight as advocates and policymakers call for closer scrutiny about its use across all forms of health coverage.

What is Prior Authorization?

Prior authorization (also called “preauthorization” and “precertification”) refers to a requirement by health plans for patients to obtain approval of a health care service or medication before the care is provided. This allows the plan to evaluate whether care is medically necessary and otherwise covered. Standards for this review are often developed by the plans themselves, based on medical guidelines, cost, utilization, and other information.

The process for obtaining prior authorization also varies by insurer but involves submission of administrative and clinical information by the treating physician, and sometimes the patient. In a 2021 American Medical Association Survey, most physicians (88%) characterized administrative burdens from this process as high or extremely high. Doctors also indicated that prior authorization often delays care patients receive and results in negative clinical outcomes. Another independent 2019 study concluded that research to date has not provided enough evidence to make any conclusions about the health impacts nor the net economic impact of prior authorization generally. Read entire article by Kaye Pestaina and Karen Pollitz at KFF.org