The issues with prior authorization

For certain medical procedures and prescriptions, doctors or healthcare facilities must first get approval from a patient’s insurance provider (i.e., the carrier must confirm they will cover a portion of the cost) before moving forward. This is called prior authorization.*

Generally, patients don’t need to go through this process for emergency services. But beyond that, prior authorizations are common—and becoming increasingly so—in many other scenarios, such as the case where a drug is expensive, risky, or targeted at cosmetic issues, or for services like imaging, rehabilitation, and surgeries.

While this process has its merits—for example, when it’s used to ensure the treatment a patient receives is truly appropriate for their condition—there are many instances in which it can negatively impact a patient’s overall health and well-being.

Below, we’ll explain why prior authorizations exist in the first place and the key problems they present.

The purpose of prior authorizations

Prior authorization isn’t intended to be malicious—rather, the goal is to ensure that the most cost-effective and safe approach is being taken by both the physician and the individual. It’s protecting insurance companies’ bottom lines, sure, but it’s also keeping stakeholders’ wallets and health needs in mind.

When done right, prior authorizations can curb excessive spending in the healthcare sector, reduce onerous care, and prevent patients from taking drugs that may lead to addiction or other nasty side effects.

Additionally, it can catch unnecessary duplications—for example, if you’re receiving care from multiple specialists who order the same tests or scans.

Finally, in some situations, prior authorization also mandates “step therapy,” where a less-expensive service or treatment is considered first before exploring pricier options. In some cases, step therapy can save patients money while often still providing them what they need to live healthy, comfortable, and risk-free lives. For example, before approving a prescription for a GLP-1 drug for weight loss, a patient might have to show that they’ve tried (without success) other dietary and physical activity solutions.

Key problems with prior authorizations

Medical care is incredibly nuanced, which is why the positive sides of this process don’t always see the light of day. More often, you’ll hear about the drawbacks—and this is certainly warranted, as drawbacks definitely exist and can have serious ramifications.

A prolonged process can lead to delayed (or skipped) care and poorer health outcomes

Because prior authorization needs to be completed before any next steps are taken, this process can delay much-needed treatments, sometimes significantly. Cancer patients, for example, might have to wait to receive life-saving chemotherapy while their condition progresses or may experience delays in testing that could shed better light on their treatment options.

It also makes the overall process burdensome for healthcare providers and patients alike. Think: mounds of paperwork, due diligence and research, and outdated practices, where much of the process is done by phone or even fax machine (yes, you read that right—by fax!).

In a 2024 American Medical Association survey, 95% of physicians said that prior authorization somewhat or significantly increases physician burnout, and 53% said it affected their patients’ job performance because of the time commitment and stress it can provoke. With the amount of treatment and procedures requiring prior authorization rising, this will only become more of a burden, leaving providers overworked and patients waiting longer (or forever) for care.

The prior authorization process can negatively impact health outcomes, too.

In the same survey, 29% percent of physicians reported that prior authorization resulted in serious consequences—including patients being hospitalized, experiencing a life-threatening event or disability, or requiring intervention to prevent permanent impairment or damage—because approval for treatment or procedures wasn’t ready in time.

With prior authorization, insurance companies can decide on a set time period in which they believe a service or treatment makes sense. If the patient or provider needs to extend that timeline for any reason, the patient has to go through the entire process again, further delaying necessary procedures. Experts worry that the stress and time commitment associated with getting prior authorization leads patients to abandon ship entirely. In the AMA survey, 78% of physicians reported that prior authorization often or sometimes results in their patients choosing to forgo a recommended course of treatment.

State-regulated health plans are also dependent on state laws, which can vary greatly and make the entire prior authorization process prolonged and overbearing. The Biden administration recently finalized rules that go into effect in 2026 requiring Medicaid managed care plans, Medicare Advantage plans, and Marketplace/exchange plans people purchase themselves to respond within seven days to a non-urgent prior authorization request—down from 14 days previously—and within 72 hours if the request is urgent.

Vague decisions lead to confusion and further health inequities

In addition, the reason(s) for prior authorization verdicts can be opaque, leaving patients blindsided when their requests are denied and making it harder for them to advocate for treatment. It’s confusing on the provider side as well, with around 60% of physicians reporting to the AMA that it’s difficult to determine whether a prescription medication or medical service requires prior authorization.

Prior authorizations bring up issues around inequity, with some research suggesting that because underprivileged communities have access to fewer resources and support, they might struggle to complete paperwork, increasing their likelihood of getting denied coverage.

One retrospective study of cancer patients between 2017 and 2020, for example, found that Hispanic patients had the highest prior authorization denial rate at 12%—higher, too, than the overall average denial rate for study participants at 10%. It also found that Asian patients had lower rates of prior authorization denials compared with white patients.

In another survey conducted by health policy research firm KFF in 2023, 22% of adults insured under Medicaid experienced prior authorization problems, compared to 11% with Medicare and 15% with employer-sponsored coverage. KFF also uncovered disparities based on the types of conditions—more problems with prior authorization for mental health issues or diabetes when compared to other treatments, for example—and how frequently a patient sought treatment.

Finally, prior authorization can result in perhaps what it’s meant to prevent: patients paying out of pocket. In the AMA survey, 79% of respondents said prior authorization led to their patients paying for medications themselves.

How Carrum is a solution to this problem

Among the many benefits Carrum Health offers individuals and employers, perhaps one of the best is the fact that members do not need prior authorization to receive care through Carrum.

This is because we “gold card” our providers, meaning they undergo a rigorous (and proprietary) quality evaluation—including ongoing monitoring of their adherence to evidence-based care guidelines—which means they don’t have to go through the traditional prior authorization process in order to treat members.

This not only speeds up our ability to provide care but leads to a better overall patient experience and stronger health outcomes.

Just because prior authorization isn’t required for our providers doesn’t mean we increase the number of procedures, either. Rather, Carrum contracts with the highest quality providers out there and aligns with them on incentives—meaning they’re motivated to perform the most appropriate care and to refer members to more conservative treatments (such as physical therapy over surgery) when it makes the most sense.

Prior authorizations may not be going anywhere anytime soon, but it doesn’t have to be a hurdle for you or your staff with the right provider. A centers of excellence program like Carrum will prioritize your people—and kick bureaucratic systems to the curb.

*If the patient is okay with paying for the full cost of the care or medication, they don’t need to go through this process since insurance won’t come into play.

The information contained on this page is for informational purposes only. No material is intended to be a substitute for professional legal or medical advice, diagnosis, or treatment.