Prior authorization is your insurer's requirement to approve certain services before covering them. Denials are common — and most people accept them without realizing the appeal process reverses a significant percentage of denials. Here's how the system works and how to use it.
Prior authorization (also called pre-authorization, pre-approval, or pre-certification) is a requirement by your health insurance company that your doctor obtain approval before performing or ordering certain services, procedures, medications, or referrals for them to be covered under your plan. Without prior authorization on services that require it, the insurer may deny the claim entirely — leaving you responsible for the full cost.
Prior authorization is not a medical decision — it's a coverage decision. The insurer is not deciding whether you need the service; they're deciding whether they'll cover it under your plan's terms. Your doctor may believe a service is medically necessary, and the insurer may still deny the authorization request. Source: CMS Prior Authorization.
The standard insurers use to evaluate prior authorization requests — whether a service is appropriate, reasonable, and necessary for the diagnosis or treatment of an illness or injury according to generally accepted medical standards. The insurer applies its own clinical criteria (often based on third-party guidelines) to determine medical necessity. A denial based on medical necessity means the insurer determined the service doesn't meet their clinical criteria — not that your doctor was wrong about your medical needs. Source: CFPB.
Prior authorization serves several purposes from the insurer's perspective: ensuring that expensive services are medically necessary before they're performed, encouraging step therapy (trying lower-cost treatments before more expensive ones), and reviewing whether the proposed service is the most cost-effective option for the clinical situation. Critics argue that prior authorization also functions as a cost-control mechanism that delays or prevents necessary care — a tension that has led to regulatory reform efforts. Source: CMS.
Prior authorization requirements vary by plan but commonly apply to:
Your plan's prior authorization list is in your Summary of Benefits and Coverage or accessible through your insurer's member portal. Your doctor's office typically handles the authorization request — but confirming that they've submitted it and that it was approved is your responsibility before any scheduled service. Source: HealthCare.gov.
The typical prior authorization process: your doctor's office identifies that a service requires prior authorization and submits a request to your insurer. The request includes clinical notes, diagnosis codes, the proposed service, and documentation supporting medical necessity. The insurer reviews the request against their clinical criteria and issues an approval, denial, or request for additional information. Routine requests must receive a decision within a defined timeframe — typically 3 to 5 business days for non-urgent requests under federal and many state regulations; 72 hours for urgent requests. Source: CMS.
A prior authorization approval means the insurer has pre-approved coverage if other plan requirements are met — it's not a guarantee of payment for the specific claim. The final claim can still be denied for reasons unrelated to the authorization: the service was coded differently than authorized, an out-of-network provider was involved, a deductible wasn't met in the expected way, or eligibility changed. Authorization approval reduces risk but doesn't eliminate the possibility of a claim issue. Always verify your EOB after the service is billed.
Common reasons for prior authorization denials:
When a prior authorization is denied, you have the right to appeal. Most insurers have a multi-level internal appeal process. The appeal is your most effective tool — a meaningful percentage of internal appeals result in coverage being approved. Here's how to approach it effectively:
If your internal appeal is denied, you have the right to external review — an independent review by a third-party organization not affiliated with your insurer. Under the ACA, most health plans must offer external review for denied claims involving medical judgment. External reviewers are bound by independent clinical standards, not your insurer's proprietary criteria. External review decisions are binding on the insurer. Research shows external review results in coverage approval in a significant portion of cases. To request external review, follow the instructions in your final internal appeal denial letter. Source: HealthCare.gov External Review.
Emergency services do not require prior authorization under the ACA — insurers cannot require pre-approval before covering emergency care, and must cover emergency services at in-network cost-sharing regardless of the provider's network status. For urgent situations that aren't true emergencies, expedited authorization requests must receive decisions within 72 hours under federal rules. If you need urgent care and can't wait for standard authorization timelines, ask your doctor to submit an urgent authorization request and document the clinical urgency. Source: CMS.
Prior authorization is a coverage gate that can delay or deny medically recommended care — but it's not a final answer. The appeal process, particularly the peer-to-peer review between your physician and the insurer's medical reviewer, reverses a meaningful share of denials when pursued properly. The key steps: get the specific denial reason, have your doctor request a peer-to-peer review immediately, submit a written appeal with a detailed letter of medical necessity, and escalate to external review if the internal appeal fails. External review decisions are binding on the insurer. Most people who give up at the first denial never use these tools. Source: HealthCare.gov.