Prior authorization (PA) requirements have faced renewed scrutiny after a fatal shooting of a health insurance CEO brought national attention to industry practices. The incident highlighted growing concerns over insurers delaying or denying care recommended by doctors and rejecting insurance claims.
PA is often the first step to getting coverage for medical care. It’s important to understand how the process works, why it can cause coverage denials, and what you can do to make it smoother and less frustrating for your employees.
PA — also known as precertification or preapproval — is a process used by insurers or third-party administrators to check if a treatment or service is covered by the health plan and medically necessary before it's approved for coverage under the benefits plan.
Doctors request prior authorization before providing certain treatments or medications. The health plan checks if the care is a covered benefit. Medical experts review the request for safety and quality using clinical policies, government regulations, evidence-based guidelines and the member’s benefit plan.
Denials often stem from incomplete forms, inadequate or incorrect details, or procedure coding. These issues can usually be fixed with updated information. More importantly, care must meet medical necessity standards: it should be proven effective, appropriate for the patient’s diagnosis or treatment, and aligned with accepted medical guidelines. If not, coverage may be denied and care plans revised to align with evidence-based guidelines. Overtreatment, or using excessive or low value services, could harm patients. That’s why health plans rely on research-backed, evidence-based policies to guide coverage decisions and ensure care is truly beneficial.
Treatments that don’t meet medical necessity can lead to legal issues, patient harm, and drive up healthcare costs. Following accepted standards helps avoid these problems and ensures safer, more effective care.
As lawmakers consider new limits on how insurers use PA, major U.S. health insurance companies are promising voluntary reforms. These include reducing the number of procedures that need preapproval, standardizing electronic submission of requests, speeding up reviews, increasing real-time approvals, using clearer communication with patients, and ensuring medical professionals evaluate denials.
Although not legally required, these pledges follow a wave of state laws aimed at making the process faster and more transparent — especially when it comes to which treatments and prescriptions need authorization.
You can actively support healthcare reforms while continuing to monitor and manage your health plans. This includes regularly reviewing reports, analyzing claim data and ensuring insurers stay accountable. At the beginning of each plan year, you should evaluate and update the list of services that require PA. Keep PA focused on high-impact procedures and services explicitly excluded from coverage — like certain cosmetic or experimental treatments.
For services with minimal risk or high approval rates, switching to a notification-only process can reduce provider workload and improve member experience. Notifications still provide value by identifying members for case management, guiding care to high-quality locations and helping members stay in-network to avoid unnecessary out-of-pocket expenses.
You can also monitor key metrics like:
When choosing an insurer or third-party administrator, you should evaluate how well policies and coverage decisions are communicated to members. Specifically, you should require that the list of services needing precertification — and the criteria used to determine coverage — be easy for both providers and members to access and understand.
We help our clients review and refine PA lists to match their coverage goals. We also track oversight metrics and assess claims for cost impact. Through clinical audits, we identify how PA or service notifications can prompt timely engagement in care programs — especially for complex or specialized conditions like transplants, kidney disease, cancer, gene therapy, infertility and more.
Early notifications tied to specific diagnoses or treatments can trigger valuable outreach from employer-selected programs, such as musculoskeletal care, maternity support, cancer management, or diabetes coaching. The core clinical value of PA lies in identifying high-need members sooner. This allows you to coordinate care, connect resources and support better health outcomes for members and their families.
