By Ali Hartnett, Director – Patient Access Solutions, AGS Health
LinkedIn: Ali Hartnett
LinkedIn: AGS Health
Prior authorization has a well-established reputation in healthcare, and not a particularly good one. In particular, healthcare leaders should pay closer attention to the consequences of prior authorization. An authorization can move efficiently through the administrative process and still be wrong. A procedure may fail to align precisely with the CPT or HCPCS code submitted for authorization, or a related procedure performed during the same encounter may be omitted. Clinical documentation may not sufficiently demonstrate medical necessity. A payer may require evidence of prior therapy that isn’t included with the request.
Any one of these issues can put reimbursement at risk. Thus, prior authorization is more than an access or administrative function; increasingly, it is an upstream revenue-integrity checkpoint. Traditionally, it sits close to patient access, and for good reason. Much of the work is administrative: determining whether authorization is required, communicating with payers, collecting information, tracking requests, and getting care approvals before delivering services.
Healthcare organizations have become quite good at building workflows around those activities. A difficulty is that the underlying requirements have become increasingly clinical and technical. A payer is not only asking whether an authorization request was submitted but may also be evaluating whether the patient’s diagnosis supports the requested service, whether the coding accurately reflects what will be performed, whether medical-necessity criteria have been satisfied, and whether the documentation shows that prerequisite treatments or diagnostic steps have occurred.
These questions require a different kind of expertise. It also creates a structural mismatch for healthcare organizations. Teams designed primarily to move authorizations through an administrative process are increasingly being asked to make decisions that can depend on clinical judgment, coding knowledge, and an understanding of payer-specific requirements.
It’s therefore possible to run a highly productive authorization operation and still create downstream revenue problems. If leadership measures success primarily by the number of requests processed or how quickly they are completed, those problems can go unnoticed until they surface elsewhere in the revenue cycle.
Small mistakes, expensive consequences
Authorization problems are often minor discrepancies that carry disproportionately large consequences. Consider a scheduled procedure in which the primary service was authorized correctly, but an additional procedure expected during the same encounter wasn’t included in the request. Or the authorization may refer to a code that does not ultimately match the service billed. The payer may require documentation showing that a patient completed a particular course of conservative therapy, but that evidence wasn’t included.
From an administrative standpoint, the authorization may appear complete. From a reimbursement standpoint, it may not be—and the consequences can compound. Staff must determine why the request was pended or denied. Clinical teams may need to provide additional documentation while coding or authorization personnel may need to reconcile claims. Ultimately, the organization may need to appeal a denial or seek retrospective authorization.
Treatment is delayed. Rework consumes staff time. Accounts receivable age while the issue is resolved. In some cases, reimbursement may ultimately be reduced or lost. The important point is where the problem began.
What eventually appears as a claim denial or write-off may actually have originated days or weeks earlier, when an authorization request was submitted without the information or expertise necessary to get it right the first time. If organizations review these cases only after they become denials, they address the financial symptom rather than the operational cause.
Clinicians not needed on every authorization
The clinical and revenue implications of prior authorization don’t mean every request requires review by a nurse, coder, or other specialist; that would replace one inefficient model with another. Many authorizations are straightforward and routine. In these cases, requirements are understood, and documentation maps cleanly to outcomes. In these cases, the likelihood of an unexpected issue is relatively low. Adding specialized review to every request would increase cost, consume scarce expertise, and potentially slow cases that should move quickly.
A better approach is to rank cases by risk.
Healthcare organizations already possess much of the information needed to do this. Historical authorization results can show which procedures and payers generate the most difficulty. Denial data can identify services where authorization problems often lead to reimbursement issues. Financial information can help identify high-dollar procedures where an error carries greater exposure.
That intelligence can help determine which authorization requests warrant additional scrutiny. A routine request with a strong history of first-pass approval may continue through a largely administrative workflow. A complex surgical procedure involving multiple codes, a service with extensive medical-necessity requirements, or a procedure associated with recurring authorization-related denials may be routed for clinical or coding review before being submitted. The objective isn’t more review, but applying the right expertise at the point where it’s most likely to prevent a problem.
Prior authorization targeting the revenue cycle
Making that distinction requires another change: prior authorization cannot operate as an isolated front-end function. Authorization teams need intelligence from what happens downstream. If a particular payer repeatedly denies claims because the billed procedure doesn’t match the authorization, that information should flow back to the team submitting the requests. If certain services generate frequent requests for additional clinical documentation, the organization should identify these patterns to adjust its submissions.
Coding can detect recurring code discrepancies, and clinical documentation teams can determine whether the record supports medical necessity. Denial teams can identify payer policies and recurring failure points, so revenue integrity can quantify the financial consequences before these procedures become bottlenecks. Conveniently, prior authorization sits upstream from all of them, which makes those feedback loops especially valuable. Without them, an organization can end up repeatedly correcting the same problem after the fact. With them, downstream revenue-cycle intelligence can become upstream prevention.
Technology also has an increasingly important role in the prior authorization process. Automation can help determine whether authorization is required, collect information, monitor payer responses, and accelerate workflows. Data can surface patterns by payer, procedure, location, and denial reason. But technology should help organizations determine where human expertise adds value rather than simply pushing more requests through the same process faster. Automating an incomplete authorization does not eliminate the problem. It simply allows the organization to create it more efficiently.
What happens after the authorization
Organizations should also reconsider how they measure authorization performance because volume, turnaround time, and staff productivity matter. Patients and clinicians cannot wait indefinitely for administrative processes to be completed, but those measures tell only part of the story.
Healthcare leaders should also understand first-pass approval rates, how frequently payers request additional information, which procedures require the most rework, and how often authorization problems contribute to downstream claim denials or write-offs. They should be able to identify whether particular payers, procedures, or locations generate disproportionate problems, and understand how often authorization issues delay scheduled care and whether those delays are increasing or declining.
Health systems should connect front-end authorization with downstream financial impacts. Otherwise, a team can meet every productivity target assigned to it while revenue continues to leak from preventable authorization failures.
Get it right before the claim exists
Prior authorization is unlikely to become simpler in the near term. Healthcare organizations will continue balancing payer requirements against the need to get patients into care quickly and keep administrative costs under control. That makes it especially important not to solve the problem simply by adding more people or more review.
Routine authorizations should move as efficiently as possible. Automation should eliminate unnecessary manual work wherever it can. Reserve specialized clinical and coding expertise for cases where complexity, financial exposure, or historical performance warrants additional review. But healthcare leaders should recognize what prior authorization has become; it’s no longer permission to perform a service, but one of the earliest points at which clinical documentation, coding, payer requirements, and reimbursement intersect.
A mistake at that intersection may not become visible until much later, when a claim is denied, an account sits unpaid, or a write-off appears on a report. By then, the organization is trying to recover revenue it might have protected upstream. So, the better opportunity is to get the authorization right before a claim is denied.