Prior Authorization (PA)

Prior authorization is a condition a health plan places on coverage of a specific item, service, or drug, requiring the plan's approval before the care is delivered. It is the plan deciding in advance rather than after the fact. The federal claims-procedure regulation defines a pre-service claim as any claim for a benefit where the plan conditions receipt of the benefit, in whole or in part, on approval in advance of obtaining medical care, at 29 CFR 2560.503-1(m)(2). That definition matters more than it sounds: the moment a plan attaches a prior authorization requirement to something, a request for it becomes a claim, the plan is on a fixed decision clock, and turning it down is an adverse benefit determination with appeal rights attached. Insurers also call the same requirement preauthorization, pre-certification, or prior approval. Nothing turns on which word a particular plan uses.

The useful way to think about prior authorization is not as paperwork but as the point where a benefit dispute is scheduled to happen. Published insurance claim sets out the federal decision deadlines that apply to group health plans, including the shorter deadline for a pre-service claim. Those deadlines are the ones that govern a prior authorization request, because the authorization requirement is precisely what makes the request pre-service. A reader who has been told to "get it approved first" and does not connect that instruction to the claims rules will wait indefinitely for an answer they are legally entitled to receive on a schedule.

Three further pieces of 29 CFR 2560.503-1 are worth knowing and are not obvious. First, concurrent care. Where a group health plan has already approved an ongoing course of treatment over a period of time or a number of treatments, paragraph (f)(2)(ii)(A) provides that any reduction or termination of that course of treatment before it ends "shall constitute an adverse benefit determination," and the plan must notify the claimant "at a time sufficiently in advance of the reduction or termination to allow the claimant to appeal and obtain a determination on review" before the benefit stops. Cutting off approved physical therapy at session twelve of twenty is a denial, not a scheduling decision, and the notice has to come early enough for the appeal to be decided first. Second, paragraph (f)(2)(ii)(B) gives a request to extend an urgent course of treatment a 24-hour decision deadline, provided the request reaches the plan at least 24 hours before the current authorization runs out. Third, deemed exhaustion at paragraph (l)(1): where a plan fails to establish or follow claims procedures consistent with the regulation, the claimant "shall be deemed to have exhausted the administrative remedies available under the plan" and may pursue remedies under ERISA section 502(a). A plan that ignores its own process does not thereby postpone the dispute.

Medicare Advantage is regulated far more tightly than this, and the headline is that an approval binds. Under 42 CFR 422.138(c), where a Medicare Advantage organization has approved a covered item or service through a prior authorization, a pre-service determination, or a concurrent determination made while the enrollee is receiving care, "it may not deny coverage later on the basis of lack of medical necessity and may not reopen such a decision for any reason except for good cause" or reliable evidence of fraud or similar fault. No parallel federal requirement was located for commercial group or individual coverage, where an authorization is commonly described in plan documents as a determination of medical necessity rather than a guarantee of payment, and eligibility, benefit limits, and coordination with other coverage are still checked when the claim is processed. That is an absence of found authority rather than a verified rule, so the safe reading is that the Medicare Advantage protection is unusually strong and should not be assumed elsewhere.

The rest of the Medicare Advantage regime is worth naming because it is specific and recent. Section 422.138(b) confines prior authorization in a coordinated care plan to three purposes: confirming diagnoses or other medical criteria behind a coverage determination, establishing medical necessity for basic benefits, and establishing clinical appropriateness for supplemental benefits. Private fee-for-service plans are not permitted to use prior authorization policies at all. On timing, 42 CFR 422.568(b)(1) gives the plan 14 calendar days for a standard decision on an item or service not subject to the prior authorization rules and, beginning on or after January 1, 2026, 7 calendar days where those rules do apply, in each case extendable by up to 14 days in three defined circumstances. An expedited determination is due within 72 hours under 422.572(a)(1), and an expedited decision on a Part B drug within 24 hours, a period the regulation says may not be extended. Since January 1, 2026, 42 CFR 422.122(a) has required a denial to state a specific reason to the provider, and 422.122(c) requires plans to publish annual prior authorization metrics, including approval, denial, and appeal-overturn rates. From January 1, 2027, 422.122(b) will require an application programming interface that reports what needs authorization and what documentation is required.

The mechanics are consistent across plan types even though the deadlines are not.

1. Find out whether the service needs authorization. The requirement is set by the plan, not by the provider, and it varies by service, by drug, and by plan year. The list changes annually, which is why an authorization that was unnecessary last year can be required this year.

2. The provider submits clinical documentation. The plan is deciding whether its own coverage criteria are met, so what persuades it is the record, not the request.

3. The clock starts when the plan receives the request. For a group health plan the pre-service deadlines in the federal claims regulation apply, which published insurance claim sets out. For Medicare Advantage the deadlines are the ones in 42 CFR 422.568 and 422.572 described above. Where waiting would seriously jeopardize health, the request can be filed as expedited and a much shorter deadline applies.

4. An approval is not open-ended. It generally covers a specified service, from a specified provider, within a stated window. Care that drifts outside those terms is a fresh request.

5. A refusal is an appealable denial, and both the internal appeal and, for most plans, an independent external review sit behind it.

A hypothetical. Ravi is enrolled in a Medicare Advantage plan and needs a procedure that his plan subjects to prior authorization. His surgeon's office submits a standard request on March 3. Because the service is subject to the prior authorization rules in 42 CFR 422.122, the plan owes a decision within 7 calendar days, so by March 10. The plan invokes the maximum 14-day extension because it is waiting on records from a non-contracted provider, which moves the deadline to March 24, and it must notify Ravi in writing of the reason and of his right to file an expedited grievance about the delay. The plan approves on March 21. Six weeks later, reviewing the $9,400 hospital claim, the plan cannot go back and refuse to pay on the ground that the procedure was not medically necessary, because 42 CFR 422.138(c) closes that door once the approval has been given. Had Ravi's health made the delay dangerous, the request could have been filed as expedited, with a 72-hour deadline instead of seven days.

Pros

• You find out before the care whether the plan will pay, which is far better than discovering it from a bill.
• The requirement puts the plan on a legal decision clock and gives you a written denial you can appeal, rather than a silent refusal at claim time.
• In Medicare Advantage an approval is binding, so the coverage question is genuinely settled rather than provisionally settled.
• Review does catch some genuine problems, including duplicate imaging, drug interactions, and services with weak evidence behind them.

Cons

• It delays care, and the delay falls on the patient rather than on whoever imposed it.
• The administrative burden lands on the physician's office, and how well a practice handles authorizations affects your outcome for reasons unrelated to your medicine.
• Outside Medicare Advantage, an authorization is commonly not a payment guarantee, so the same claim can still be reduced later for a different reason.
• The rules are set annually by the plan, so a stable treatment can suddenly require approval it never needed before.
• Appeal rights only help people who use them, and a denial that is never appealed simply stands. Since 2026, Medicare Advantage plans have had to publish how often their own denials are approved after appeal, which is one of the few places a consumer can check that rate.