The Prior Authorization Burden on Physician Practices

Every physician practice in the United States deals with prior authorization. It is woven into the fabric of modern healthcare delivery so deeply that most practice managers cannot remember a time without it. But the scale of the burden has grown dramatically over the past decade, and the data tells a story that should concern every practice owner, office manager, and clinician who cares about sustainable operations and patient access to care.

The Numbers Behind the Burden

The American Medical Association has conducted annual surveys on prior authorization since 2017, and the findings have been remarkably consistent — and consistently alarming. In its 2023 survey, the AMA found that physicians and their staff spend an average of nearly two full business days per week completing prior authorization requirements. That is not a typo. Roughly 40% of a practice's administrative capacity is consumed by a process whose stated purpose is to ensure appropriate utilization.

Consider what that means in concrete terms. A five-physician practice with three dedicated authorization staff members is spending the equivalent of 1.2 full-time employees just on prior authorization tasks every week. Over the course of a year, that is more than 2,400 hours — time that could be spent on patient communication, care coordination, billing follow-up, or any number of activities that directly support the practice's mission and financial health.

Where the Time Goes

The prior authorization process is not a single task. It is a chain of interconnected steps, each with its own friction points. A typical prior authorization request involves:

• Identifying the requirement: Determining whether a given service, medication, or procedure requires prior authorization for a specific patient's plan. This alone can take significant time, as payer requirements change frequently and vary by plan type.
• Gathering clinical documentation: Pulling relevant chart notes, lab results, imaging reports, and prior treatment history to support the request. This often requires coordinating across multiple systems and sometimes requesting records from other providers.
• Submitting the request: Completing the payer's required forms — whether electronic, fax-based, or through a payer portal — with the correct clinical information mapped to the payer's specific criteria.
• Following up: Checking on the status of pending requests, responding to payer requests for additional information, and managing the timeline to ensure patients are not left waiting.
• Handling denials: When a prior authorization is denied, the process starts over in many ways — now with the added complexity of understanding the denial reason and building an appeal.

Each of these steps involves manual effort, clinical judgment, and attention to detail. The cumulative effect is a process that pulls clinical and administrative staff away from direct patient care and into a cycle of paperwork and phone calls that can feel endless.

The Financial Impact on Practices

The direct labor cost of prior authorization is substantial, but it is only part of the financial picture. The CAQH Index — an annual study of administrative transactions in healthcare — has estimated that the average cost of a manual prior authorization transaction is approximately $11, compared to roughly $1.50 for a fully electronic transaction. For a practice that processes hundreds or thousands of prior authorizations per year, these costs add up quickly.

But the indirect costs may be even more significant. When prior authorization delays cause patients to defer or abandon treatment, the practice loses the downstream revenue associated with that care. When staff members burn out and leave because they spend their days on hold with payer call centers, the practice incurs recruitment and training costs. When physicians spend time on prior authorization instead of seeing patients, the practice's capacity to generate revenue shrinks.

A mid-size specialty practice processing 200 prior authorizations per month at an average manual cost of $11 per transaction is spending $26,400 per year just on the direct transaction costs. Factor in the indirect costs — lost appointments, staff turnover, physician time — and the true annual cost easily exceeds $100,000 for many practices.

The Clinical Cost

The AMA's survey data consistently shows that prior authorization has measurable effects on patient care. In the 2023 survey, 94% of physicians reported that prior authorization delayed access to necessary care. More than one in three physicians reported that prior authorization had led to a serious adverse event for a patient in their care. These are not abstract statistics — they represent real patients whose treatment was delayed or denied by an administrative process.

The clinical impact is particularly acute in specialties where timely treatment is critical. Oncology practices, for example, may face prior authorization requirements for chemotherapy regimens where delays of even a few days can affect outcomes. Rheumatology practices prescribing biologics often navigate weeks-long authorization processes while patients continue to experience disease progression. The gap between when a physician determines a treatment is necessary and when the patient actually receives it is widened by prior authorization in ways that can have lasting consequences.

Why the Burden Keeps Growing

Several factors have contributed to the expansion of prior authorization requirements over the past decade. Payers have expanded the list of services requiring authorization, particularly for specialty medications and advanced imaging. New plan designs with narrower formularies have increased the frequency of step therapy and formulary exception requests. And the consolidation of payer organizations has not led to the standardization that many hoped for — instead, practices often face different requirements from different plan products under the same payer umbrella.

At the same time, the tools available to practices for managing prior authorization have not kept pace with the growing requirements. Many payers still rely on fax-based processes or proprietary portals that do not integrate with practice management systems. The lack of standardization across payers means that staff must learn and navigate multiple systems, each with its own quirks and requirements.

What Practices Can Do

While the systemic issues with prior authorization require policy-level solutions, practices are not powerless. There are concrete steps that can reduce the burden and improve outcomes:

• Track your data: Understanding which payers, procedures, and medications generate the most prior authorization volume — and which have the highest denial rates — allows practices to allocate resources more effectively and identify patterns that can inform strategy.
• Standardize documentation: Creating templates and checklists for common prior authorization scenarios ensures that clinical documentation meets payer criteria on the first submission, reducing back-and-forth.
• Designate specialized staff: Staff members who focus on prior authorization develop expertise with specific payer requirements and build relationships with payer representatives. This specialization improves efficiency and approval rates.
• Adopt technology strategically: Electronic prior authorization tools, when implemented well, can significantly reduce the time and cost of each transaction. The key is choosing tools that integrate with existing workflows rather than adding another system to manage.

Looking Forward

The prior authorization burden on physician practices is not a new problem, but it is a growing one. As payer requirements expand and practice margins tighten, the operational and financial pressure will only increase. Practices that invest in understanding their prior authorization landscape — the volume, the costs, the patterns, and the outcomes — will be better positioned to manage the burden effectively and advocate for the systemic reforms that the healthcare industry needs.

The AMA and other physician advocacy organizations continue to push for meaningful reform at the federal and state levels. In the meantime, practices must find ways to operate efficiently within the current system while protecting their patients' access to timely, appropriate care. It is a difficult balance, but it is one that every practice must strike.