How Healthcare Works: Prior Authorization

By Abby Newberry

If your doctor has ordered certain medications, tests, or procedures, you may have been notified that they require Prior Authorization.

Prior Authorization is a process used by insurance companies to verify that high-risk or high-dollar treatments ordered by doctors are medically appropriate and cost-effective.  This can look very different for each patient, depending on what is being ordered and their individual insurance coverage.  

Prior Authorization may also be called Preauthorization, Preapproval, or Precertification. Sometimes it’s referred to by the shorthand, “PA”.   

In this article, we will use the word “treatment” as a general term to refer to medicines, tests, or procedures that may require Prior Authorization.

How will I know if I need Prior Authorization?

If a treatment requires PA, the insurance company will notify the provider who ordered the treatment.  The doctor or nurse will initiate the process of gathering the requested information and sending it to the insurance company.  The insurance company may also notify you (the patient) as a courtesy.

Sometimes your doctor may need data from another provider, such as the results of tests performed at a different facility.  You can help ensure a smooth process by keeping an organized copy of your own medical records, test results, and a list of medications you are taking or have previously taken, in case that data is needed.

If you are uninsured or you choose to pay out of pocket for a treatment rather than filing a claim with insurance, prior authorization will not apply to you.

What information does the insurance company require for Prior Authorization?

At a minimum, the following will be required for a prior authorization:

• The patient’s name and demographic information

• The ordering physician’s name and credentials

• What treatment is being ordered, and the specifics of how it should be administered

• A medical diagnosis related to the order

• The ordering physician’s signature

• Pharmacy or Facility fulfilling the order

In many cases, further information will be required, which may include:

• Specific test results related to the diagnosis

• Up-to-date Hospital notes or Clinic notes to show disease progress 

• Evidence of an updated physical exam

• Alternative treatments tried prior to initiating the current requested treatment

• Specific medical guidelines supporting the need for the particular requested treatment

• Expected duration of treatment

• Whether this is a new prior authorization for the treatment or the renewal of an existing PA

What is Step Therapy?

Your insurer may require evidence of Step Therapy before approving certain treatments.  

Essentially, this means that your doctor needs to prove to insurance that:

• You have tried certain cheaper or insurance-preferred options for treating your condition and

  • They did not adequately treat your condition

  • You were not able to tolerate the side effects

  • The treatment is contraindicated (not recommended) for medical reasons

•  You would still benefit from the treatment the doctor originally prescribed, even though it may be more expensive or high-risk.

This is one of the key reasons why it is important to keep good medical records!  Insurers frequently ask for detailed information about when you started and stopped a certain treatment and the reasons why.  They may deny coverage without this information.

Which Medicines and Procedures Require Prior Authorization?

Each insurance company maintains a list of medications, tests, and procedures that require prior authorization in order to be covered.  This list is typically updated yearly, although in certain circumstances an insurer may modify coverage requirements for certain treatments outside of the typical schedule.

Insurers often require authorization for:

• Brand-name medications that may have a generic alternative

• Newer or more expensive treatments that may have a cheaper alternative

• Medications that are at high risk for abuse or noncompliance

• Treatments that have a high risk of adverse health effects

• Medications prescribed at a higher-than-normal dose

• Treatments ordered for off-label use

• Drugs that are not on the insurance's list of preferred medications, called a formulary

Your physician may know in advance some of the tests or treatments that are likely require prior authorization, particularly for specialty medicines or tests they order frequently.  More often, the ordering physician will not know if prior authorization is required until the order has been checked with insurance.

How Long Does it Take to Obtain Prior Authorization?

It may take anywhere from a couple of days to a couple of weeks to obtain prior authorization.  In cases where the need for authorization is urgent, your provider can request an expedited review, meaning the case will ideally receive priority in review and decision-making by the insurer.  Expedited reviews are usually meant to receive a decision within 24 hours.

If an authorization is denied and requires appeal, the process can take several months.

Certain emergency procedures or tests do not require prior authorization because the delay in decision-making and treatment could cause grave harm to the patient. This may vary by insurance policy.

Does Prior Authorization Expire?

Yes, usually prior authorization expires every 6 to 12 months and requires renewal.  The start and end dates for an authorization should be specified in the approval letter from the insurer.  

Typically, the insurance company will notify the patient and the ordering provider when the authorization is about to expire.

What If Prior Authorization is Denied?

Denials can be appealed.  If a PA is denied, the insurer is legally required to provide a written reason for the denial.  

If you and your provider choose to appeal the denial, your provider will gather further information about your medical condition and why the medicine or procedure is felt to be medically necessary, or why the denial is felt to be unjustified.  This information is then sent back to the insurer for reconsideration.  

Sometimes prior authorizations go through more than one cycle of denial and appeal. 

If the insurer ultimately declines to cover the requested treatment, you and your provider may work together to determine if you are able and willing to cover the treatment out of pocket or if you should try an alternative.

If your authorization request is denied for a medication and you are unable to pay out of pocket, there are some alternative strategies you and your doctor may use to get you the medication:

• Free samples from the doctor’s office (if available)

• Prescribing a higher dose that can be split into the dose you need

• Separately prescribing the drugs in a combination drug

• Prescribing a 90-day supply, which is often more cost-effective than a 30-day supply

• Applying for drug manufacturer rebates

• Financial assistance programs, such as grants or charitable foundations

• Utilizing drug discount programs such as GoodRx

• Using certain pharmacies that offer prescription programs of inexpensive generic medications, such as Wal-Mart’s $4 drug list

• Prescribing to independent pharmacies that may be willing to negotiate a lower price or payment plan

Prior Authorization can seem like an overwhelming hurdle to treatment.  It is important to stay in regular communication with your doctor and your insurance company if you have questions or concerns.  They can often provide guidance and resources to help ease your mind about barriers to receiving treatment.

References

Cigna. (n.d.). What is Prior Authorization in Health Insurance? https://www.cigna.com/knowledge-center/what-is-prior-authorization

Evans, A. (2023, February 21). What is Step Therapy? How to Get Insurance to Pay for Your ‘Non-Preferred’ Medication. GoodRx.  https://www.goodrx.com/drugs/savings/what-is-step-therapy

Marsh, T., & Murdock, J.  (2025, July 10).  What Is Prior Authorization? A Look at the Process and Tips For Approval.  GoodRx.  https://www.goodrx.com/insurance/health-insurance/prior-authorization-what-you-need-to-know

National Association of Insurance Commissioners. (2024, November 5). Prior Authorization: What It Is, When it’s Used, and Your Options. https://content.naic.org/article/what-prior-authorization

Assessed and Endorsed by the MedReport Medical Review Board