Prior Authorization (PA)
Prior authorization is the payer process requiring providers to obtain advance approval before delivering certain services, procedures, medications, or referrals — representing one of the largest administrative burdens in US healthcare.
What is Prior Authorization?
Prior authorization (PA), also called pre-authorization, pre-certification, or pre-approval, is a utilisation management tool used by health insurers requiring providers to obtain approval from the payer before delivering specified services. Payers use PA to confirm that services are medically necessary, clinically appropriate, and covered under the patient's benefit plan before agreeing to reimburse them. The AMA reports that physicians and their staff spend an average of 13 hours per week managing PA requests.
CMS Turnaround Time Requirements
CMS has established regulatory turnaround time (TAT) requirements for Medicare Advantage and Part D plans:
- Urgent/Expedited PA: 72 hours (3 calendar days)
- Standard PA: 7 calendar days
- Concurrent review (inpatient): Notification within 1 business day of determination
The CMS Prior Authorization Final Rule (CMS-0057-F, effective 2026) requires Medicare Advantage, Medicaid, and CHIP plans to implement FHIR-based PA APIs, provide PA decisions within 72 hours for urgent requests and 7 days for standard requests, and include specific reasons for denial in all PA denial notices.
Gold Carding Programmes
Several states have enacted "gold carding" laws that exempt providers with demonstrated high PA approval rates (typically 90%+ approval over 12 months for specific service categories) from having to obtain PA for those services with that payer. Texas, Oklahoma, Arkansas, Indiana, and other states have passed gold carding legislation. Analytics tracking provider-level PA approval rates by service type and payer are the foundation for qualifying for gold carding programmes.
PA Analytics
Key PA analytics metrics include: PA approval rate by payer and service type, average PA turnaround time vs payer TAT requirements, PA denial reason distribution, appeal success rate, and revenue at risk from pending PAs. Practices should track the proportion of denials that are overturned on appeal — a high appeal reversal rate (> 40%) indicates the PA was likely medically appropriate and the initial denial was administrative rather than clinical.