How Prior Authorization for Medical Services Works

There are many administrative pain points providers face in the medical field, and one of the most common is prior authorization. This can be a frustrating hurdle that providers need to clear before they can perform a test or dispense certain medications for their patients, especially if they don’t know that there are other ways in which prior authorization works. Given the extensive learning curve, a medical practice should use expert prior authorization services to ensure claims are reimbursed. 

What Is Prior Authorization?

Prior authorization is a process insurance companies use to determine whether a prescribed product or service (e.g., imaging studies, medications, surgeries) will be covered. The prior authorization ensures that the service will be paid in whole or in part. For example, once a provider orders an MRI for a patient, the provider may need to contact the insurance company to confirm coverage.

Fiercehealthcare.com says healthcare professionals could have saved $13.3 billion on administrative waste in 2020, but now much, much more in 2024. Prior authorization can be a frustrating hurdle, delaying patients’ access to the care they need. Therefore, doctors need to understand how prior authorization works and how they can maximize the chances of getting the claim covered. A service like DataMatrix can help the practice’s bottom line. 

How Prior Authorization Works?

A Prior Authorization ensures that treatments, imaging, or medications are medically necessary before insurers approve them. While its purpose is sound, the process has often been slow, inconsistent, and frustrating for both patients and providers.

There are several steps to follow so that prior authorizations work. Here are a number of those steps. 

• The doctor will usually try to order an Imaging scan or a specific medication. After the order is put through, the person running the task will be alerted to the prior authorization status of that medication or test. For example, if a doctor orders a medication or trial, the practice must check with the insurance company for prior authorization.
• At this time, the practice needs to start a prior authorization process. The information required to submit the request can vary from insurance to insurance. Typically, this process is handled over the phone, via a secure email server, or through fax.
• It is not unusual for a prior authorization situation to take a few days or weeks to resolve. It may require multiple phone calls and a lot of waiting.
• At the end of the process, the insurance company will either approve or deny the prior authorization request. If the claim is denied, the doctor may have the option to appeal the decision.

Doctors need to understand every option because this process can take such a long time

The Winds of Change (They Are’a Blowing)

In June 2025, more than 50 major insurers pledged to reform the PA process, a turning point for the industry. Their commitments include:

• Reducing the number of services that require prior authorization (potentially cutting requirements by half by 2026).

• Standardizing electronic submission and real-time adjudication by 2027.

• Guaranteeing continuity of approved authorizations for 90 days when patients switch insurers.

These changes are aimed at easing administrative burdens and improving patient access to care. For medical practices, that means fewer manual submissions and greater transparency about what’s approved and why.

The Reality Behind the Reform

While these reforms are promising, they’re voluntary, and implementation will vary widely. Many payers and EHR vendors will adopt changes at different speeds. Smaller practices, in particular, may struggle with the technology and training required to stay compliant.

Complex cases like specialty drugs, imaging, and advanced procedures will continue to require manual review, meaning the PA process won’t disappear; it will simply evolve.

Professional Services Can Streamline the Process

Even though it can be frustrating to go through the prior authorization process, medical practices do not have to do so on their own. There are professional services available that can make the process easier.

There is no reason why doctors shouldn’t outsource prior authorization services to a specialist to understand the most common reasons why a prior authorization might not be approved. They can anticipate these issues, avoid these obstacles, and make it easier for patients to get the care they need.

BONUS READ: If you are interested in prior authorizations, then you know that denials are a part of it. Here is a complete guide to the reasons for denials and how to decrease prior authorization denials

This can also take much of the stress off the practice because they do not have to do as much paperwork. Providers can spend their time helping their patients, focusing on making the best possible medical decisions for their needs.

Types of Medical Procedures Requiring Prior Authorization: A Comprehensive Overview

Prior authorization is crucial in healthcare, ensuring that medical procedures and activities are appropriate, safe, and cost-effective for patients. This process involves obtaining approval from insurance companies or healthcare providers before specific treatments, tests, or services can be carried out. While specifics may vary, here is a comprehensive list of medical procedures and activities that commonly require prior authorization.

• Specialty Medications: Certain medications, especially high-cost specialty drugs, may require prior authorization. These medications often treat complex conditions such as autoimmune diseases, cancer, or rare genetic disorders. The prior authorizations for medications ensure that patients meet specific criteria and use these powerful medications appropriately.
  • According to Am J Health Syst Pham, the specialty drug market saw a 9% increase in demand in 2024, largely due to the growing number of treatments for rare genetic disorders and cancer therapies.

• Advanced Imaging and Diagnostic Tests: Procedures like MRIs, CT scans, PET scans, and genetic testing may need prior authorization. These tests are valuable tools in diagnosing and monitoring various conditions. Insurance companies often want to confirm that these tests are necessary and will provide helpful information for the patient’s healthcare.
  • According to a study by United Healthcare, 27% of imaging tests required prior authorization in 2023 to reduce unnecessary or redundant diagnostic procedures.

• Surgical Procedures: Certain minor and significant surgeries might require prior authorization. This can include elective surgeries, organ transplants, bariatric procedures, and more. Prior authorization helps ensure that the proposed surgery is medically necessary and that the patient meets specific criteria.
  • By mid-2024, elective surgeries like bariatric procedures saw a 15% increase in prior authorization requests as insurance companies tightened guidelines for non-emergency surgeries.

• Inpatient Hospital Stays: Admission to a hospital for specific conditions or treatments may require prior authorization. Insurance companies want to verify that the hospital stay is medically necessary and that the proposed treatment cannot be effectively administered on an outpatient basis.
  • In 2024, 35% of inpatient admissions required prior authorization, with many insurance providers focusing on reducing unnecessary hospital stays by promoting outpatient treatments.

• Home Healthcare Services: Home healthcare services, such as skilled nursing care or medical equipment delivery, may need prior authorization. This process helps patients receive the necessary care and equipment in the comfort of their homes.
  • Home healthcare services rose by 12% in 2023, driven by an aging population and an emphasis on post-acute care at home rather than prolonged hospital stays.

• Physical Therapy and Rehabilitation: Insurance companies might require prior authorization for extended physical therapy or rehabilitation courses. This confirms that the treatment plan is appropriate and aligns with the patient’s medical needs.
  • In 2024, approximately 40% of physical therapy cases required prior authorization, and there was an increased focus on evidence-based rehabilitation plans.

• Specialty Consultations: Consultations with specialists outside a primary care physician’s network often need prior authorization. This step allows the insurance company to confirm that the referral to the specialist is appropriate and will result in effective medical care.
  • Last year, it was reported that nearly 25% of referrals to specialists required prior authorization, particularly for out-of-network specialists, due to rising costs in specialized care.

• Durable Medical Equipment: Wheelchairs, oxygen tanks, and CPAP machines may require prior authorization. This process ensures that patients genuinely need the equipment and that it will contribute to their health and well-being.
  • A 2024 report showed that 22% of durable medical equipment requests were initially denied due to insufficient documentation, highlighting the need for thorough medical justification.

• Infertility Treatments: Assisted reproductive technologies like in vitro fertilization (IVF) or intrauterine insemination (IUI) may need prior authorization. Insurance companies might want to verify that these treatments are medically necessary and that patients meet specific criteria.
  • Last year, the number of prior authorizations for infertility treatments grew by 18%, reflecting the increasing use of IVF and other reproductive technologies as treatments become more advanced and accessible.

• Non-Emergency Transportation: Transportation services for medical appointments, especially if specialized vehicles are required, might need prior authorization. This helps insurance companies ensure that transportation is necessary due to a patient’s medical condition.
  • A 2023 study found that 20% of non-emergency medical transportation patients, particularly those needing specialized vehicles or long-distance services, required prior authorization.

The Future of Prior Authorization

The PA process is moving toward greater standardization and predictability, but it won’t vanish. Instead, it’s becoming a managed partnership between humans and technology. Over time, data sharing between payers and providers will deepen, creating new opportunities for predictive analytics and outcome-based authorization models.

For medical practices, this shift represents more than just compliance; it’s a chance to reclaim time, reduce friction, and focus on patient care.

Trust DataMatrix Medical for Prior Authorization Support

To ensure your patients receive the care they need, you must work with professionals who can handle the prior authorization process on your behalf. At DataMatrix Medical, we have extensive experience working with various medical practices, and we can help you streamline the process of getting your prior authorization approved. If you want to learn more about how he can help you, contact us today to speak to a team member about our Prior Authorization Services.