What is prior authorization?

At its core, prior authorization is the payer's answer to a question asked in advance: will this specific service, for this specific patient, be considered covered and clinically appropriate under the plan's rules? A provider or their staff submits a request that identifies the patient, the ordering and rendering clinicians, the diagnosis, and the proposed service, along with clinical documentation that supports it. The plan reviews that request against its published criteria and returns a decision. When the answer is yes, the plan typically issues an authorization number that ties the approval to particular services, date ranges, and quantities.

Prior authorization is a requirement attached to certain services, not to every claim. Payers apply it selectively — often to higher-cost imaging, elective surgeries, specialty drugs, durable medical equipment, and some outpatient procedures — while routine visits generally proceed without it. The specific list is set by each payer and plan and changes over time, so the authoritative source is the current payer policy rather than any fixed catalog. Which services require prior authorization examines how those lists are structured.

Payers use prior authorization as a form of utilization management — a way to review certain care before it happens rather than paying for it and reviewing afterward. From the plan's perspective, the review is meant to confirm that a service is medically necessary, matches evidence-based criteria, and is delivered in an appropriate setting, and that any required lower-cost or first-line alternatives have been considered.

• Confirming medical necessity against the plan's clinical criteria before the service is rendered.
• Directing care to a covered, appropriately intensive setting.
• Applying step therapy and other sequencing rules, particularly for specialty medications.
• Managing utilization and cost for high-dollar procedures, imaging, and equipment.

Whether any of these apply to a given service depends entirely on the payer and plan. The same procedure may require authorization under one plan and none under another, and Medicare, Medicaid, and commercial products each set their own rules.

The mechanics differ by payer and submission channel, but the process follows a recognizable arc from request to decision. The prior authorization workflow covers each stage in depth; the summary below shows the shape.

1. 01

   Confirm the requirement

   Before scheduling, staff check whether the planned service requires authorization under the patient's current plan, since the answer varies by payer, product, and date.
2. 02

   Gather documentation

   The request is assembled with the diagnosis, the proposed service, ordering and rendering provider details, and the clinical records that support medical necessity.
3. 03

   Submit the request

   The request is sent through the payer's channel — a portal, an electronic transaction, fax, or phone — and logged so its status can be tracked.
4. 04

   Track the decision

   The payer reviews and returns an approval, a denial, or a request for more information; turnaround times are set by payer and plan and by whether the request is standard or expedited.
5. 05

   Record the outcome

   An approval, its authorization number, covered date span, and any unit limits are recorded so the eventual claim can be matched to what was authorized.

Prior authorization is often confused with neighboring terms that describe different things. Some payers use precertification or pre-approval as near-synonyms, while predetermination and referral describe distinct processes. Precertification, predetermination, and prior authorization and prior authorization vs. referral draw the full distinctions; the table below summarizes the core differences.

Precertification

A term many payers use interchangeably with prior authorization for advance approval of a service; the exact meaning is defined by each payer.

Step therapy

A rule requiring a patient to try a preferred or first-line option before the plan authorizes an alternative, common in medication authorizations.

Peer-to-peer review

A discussion between the ordering clinician and the plan's reviewer, often used to contest a denied authorization request.

When a required authorization is missing, invalid, or does not match the service billed, the claim is typically denied. These authorization-related denials behave differently from clinical denials: the issue is usually not whether the care was appropriate but whether the administrative approval was obtained and billed correctly. Depending on the payer contract, the resulting balance often cannot be billed to the patient and becomes a provider write-off.

A denial of the authorization request itself can frequently be challenged. A peer-to-peer review is a common next step, and a formal appeal may follow; approvals, denials, and peer-to-peer review walks through those paths. Payers also define processes for retroactive and urgent authorizations, where care must proceed before a standard review is possible — for example in an emergency — though the availability and rules for these paths vary.

There is no single national list of what requires prior authorization. Each payer and plan sets its own rules, and those rules differ across Original Medicare, Medicare Advantage, Medicaid, and commercial coverage. In Original Medicare, prior authorization applies to a limited, defined set of items and services published by CMS. Under prior authorization under Medicare Advantage and Medicaid managed care, plans run their own authorization programs within federal and state frameworks.

Federal policy is also reshaping how the process works. The CMS Interoperability and Prior Authorization rule sets requirements aimed at making certain payers' authorization processes more transparent and electronic, and electronic prior authorization standards continue to evolve. Because requirements, timeframes, and covered-service lists change over time and vary by jurisdiction, the reliable approach is to check the current payer policy and the authoritative federal or state source rather than rely on a fixed rule.