Prior authorization drains hospital revenue
NEW YORK, UNITED STATES — United States physicians spend 13 hours weekly on prior authorization (PA) requests, with 93% reporting resulting care delays, according to Terry Russell, vice president of implementation and optimization at Conifer Health Solutions in a report from MedCity News.
Prior authorization burden strains physician practices
Data from the American Medical Association (AMA) cited by Russell shows physicians and their care teams complete an average of 39 PA requests per physician each week.
Ninety-three percent of physicians report care delays tied to these requirements, and 82% say patients abandon recommended treatment altogether when facing authorization obstacles.
Together, these figures frame prior authorization not as an administrative inconvenience but as a direct driver of revenue leakage and care disruption.
According to Russell, the volume and complexity of the PA process contribute to staff fatigue, high turnover, and rising operating costs across hospitals, health systems, and physician practices. The administrative load has transformed a compliance function into a frontline revenue cycle challenge that increasingly requires technology-enabled solutions.
Eighty-two percent of physicians report that patients abandon recommended treatment due to prior authorization obstacles, underscoring the clinical and financial cost of unresolved authorization delays.
CMS and payers cut authorization requirements
Centers for Medicare and Medicaid Services (CMS) is advancing electronic PA through Fast Healthcare Interoperability Resources (FHIR)-based application programming interfaces (APIs), with certain health plans required to comply by January 1, 2027.
In parallel, UnitedHealthcare has committed to eliminating PA requirements for 30% of previously approved services by the end of 2026. Humana has announced plans to remove approximately one-third of outpatient PA requirements and to issue decisions within one business day on at least 95% of complete electronic requests.
According to Russell, automation and artificial intelligence (AI) are becoming strategic imperatives for health systems that cannot absorb the cost or headcount required to manage PA volume manually.
Workflow standardization and predictive risk identification are among the capabilities health systems are deploying to reduce administrative friction at the point of authorization.
UnitedHealthcare plans to eliminate prior authorization requirements for 30% of previously approved services by 2026, as payers and regulators move to reduce authorization friction across the system.
For hospitals and health systems managing high PA volume, outsourcing prior authorization support to specialized business process outsourcing (BPO) firms with revenue cycle management (RCM) expertise has become a viable operating strategy.
Offshore teams with U.S. payer knowledge handle PA submissions, status tracking, appeals, and documentation workflows at a fraction of in-house staffing costs.
As CMS deadlines approach and payer policies shift, the case for outsourcing PA work is strengthening. BPO providers with FHIR-ready platforms and dedicated authorization teams are positioned to absorb the transition load as health systems reshape their revenue cycle operations.
Related news
- Medicare’s AI pilot sparks deny-faster fears · 29 Jul
- AI prior authorization faces bipartisan backlash in congress · 26 Jun
- Healthcare AI automates prior authorization backwards: Oprox CEO · 09 Jul
Disclosure: Outsource Accelerator uses AI tools in the backend of its editorial workflow. Every article is reviewed and verified by a human editor before publication.
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