What is Prior Authorization

Prior authorization is a requirement from your health insurance company that your doctor obtain approval before providing certain medical services, procedures, or medications in order for them to be covered.

Prior authorization (also called preauthorization, precertification, or prior approval) is a process by which your health insurance company must approve certain medical services, procedures, specialist referrals, or prescription medications before you receive them in order for the costs to be covered. If you skip the prior authorization step and proceed with a service that requires it, your insurer can deny the claim — leaving you responsible for the full cost.

Prior authorization exists, ostensibly, for cost control and medical necessity determination. Critics argue it often functions primarily as a cost-containment tool that delays or denies necessary care.

Services That Commonly Require Prior Authorization

• MRI, CT scans, and advanced imaging
• Elective surgeries (knee replacement, hernia repair, bariatric surgery)
• Mental health or substance use treatment (especially inpatient)
• Specialty and high-cost medications (biologics, specialty drugs)
• DME (durable medical equipment like CPAP machines, wheelchairs)
• Physical therapy beyond a limited number of visits
• Out-of-network specialist care (on some plans)
• Hospital admissions (non-emergency)

How the Prior Authorization Process Works

1. Your doctor determines you need a covered service that requires authorization.
2. Your doctor's office submits a request to your insurer with clinical documentation supporting medical necessity.
3. The insurer reviews the request — often against clinical criteria — and approves, denies, or requests more information.
4. You receive notice of approval or denial.
5. If denied, you have the right to appeal the decision.

Timelines vary: urgent requests must typically be decided within 72 hours under federal law; standard requests within 14 days.

What to Do If Prior Authorization Is Denied

A denial isn't final. You have several paths:

1. Internal appeal: Request that the insurer review the decision. Your doctor can submit additional documentation supporting medical necessity.
2. Peer-to-peer review: Your doctor can request a direct conversation with the insurer's medical reviewer.
3. External review: An independent organization reviews the denial. Insurers must comply with the external reviewer's decision under federal law (for most plans).
4. State complaint: Your state's insurance commissioner can investigate improper denials.

The Financial Stakes

Receiving a service without proper authorization when one is required can result in claim denial for the entire cost. On expensive procedures — a $40,000 surgery, a $10,000 MRI series, months of specialty medication — this can produce catastrophic bills. Always verify authorization requirements with both your doctor's office and your insurer before any non-emergency scheduled service.

Prior Authorization and Medications

For prescription drugs, this often means your doctor must submit documentation explaining why a brand-name or non-formulary drug is medically necessary when a cheaper alternative exists. This is sometimes called step therapy — your insurer requires you to "fail first" on a less expensive drug before they'll cover the more expensive option your doctor prescribed. This practice has become controversial and is regulated differently across states.