Expert Perspectives on Prior Authorization Collaboration

Strategies for payors and providers to reduce denials, delays, and administrative challenges in prior authorization

FHAS recently brought together leaders from across the healthcare industry to explore one of its ongoing challenges: prior authorization (PA). James L. Bobeck, Esq., CEO of FHAS, moderated a thoughtful exchange of perspectives with Janice Bohan, Chief Operating Officer at FHAS, and Michael Mercurio, SVP of Customer Success & Operations at CodaMetrix.

The conversation focused on the administrative complexities of PA and offered collaborative strategies to improve efficiency, reduce friction, and ultimately support better outcomes for providers, payors, and patients.

The Current State of Prior Authorization

An overview of the current prior authorization landscape is provided, supported by recent data:

• In 2023, CMS conducted approximately 400,000 prior authorization reviews, with a denial rate of nearly 29%.
• Medicare Advantage plans processed close to 50 million determinations; while 6.4% of these determinations were denied, 81.7% of appealed denials were eventually overturned.

These figures illustrate a system where a significant portion of initial denials are reversed upon appeal, which suggests an opportunity for improvement in the initial review process. This situation can contribute to increased administrative work for providers and delays in reimbursement, while patients may face treatment delays.

Addressing these challenges could help streamline the process and improve efficiency across the system.

Visualizing the Impact of Prior Authorization

The following graph illustrates the decline in total paid amounts for select procedures following the implementation of prior authorization in July 2020. While payments have gradually stabilized in the years since, they have not returned to pre-authorization levels, indicating a lasting effect on reimbursement patterns and care delivery.

Graph 1: "Blepharoplasty, Botulinum Toxin Injection, Panniculectomy, Rhinoplasty, and Vein Ablation – By Date of Service"

These trends highlight the need for continued discussions between payors and providers. By refining the prior authorization process, stakeholders can work toward a system that reduces delays and administrative burdens while ensuring timely and appropriate care for patients.

Common Denial Reasons

The discussion explored some of the most frequent and preventable causes of prior authorization denials—issues that continue to create friction across the healthcare system:

• Lack of Documentation – Incomplete submissions are a top contributor to denials. Missing clinical notes, imaging reports, or lab results can lead to rejections that might have been approved with the right supporting materials.
• Not Medically Necessary – Services deemed cosmetic, investigational, or lacking evidence-based justification are frequently denied, even in cases where patients appear to benefit clinically. This category often reflects differences in how payors and providers define “necessity.”
• Does Not Meet Plan Criteria – Authorization requests that don’t align with a specific insurer’s clinical guidelines or administrative requirements may be denied, even if the procedure is standard practice elsewhere. These denials highlight the challenge of navigating varying plan protocols.
• Incorrect Coding – Errors in coding—especially mismatches between CPT codes and clinical intent—are another leading cause of denials. This is particularly impactful in Medicare cases, where even minor discrepancies can derail an otherwise valid request.
• Non-Contractual Services – Sometimes, a service is denied not because it’s unnecessary, but because an out-of-network specialist provides it or falls outside a patient’s plan coverage. These situations create additional burdens for both patients and providers, despite medical necessity.

Across all categories, one theme stood out: many denials are avoidable. With clearer communication, better documentation practices, and shared understanding of plan requirements, there’s significant opportunity to reduce delays and improve outcomes.

Prior Authorization Activity Growth

The volume of prior authorization determinations has increased significantly over the past few years, as shown in the graph below. From 30 million determinations in 2020, the number has climbed to nearly 50 million in 2023, underscoring the expanding role of PA in healthcare systems and its associated administrative burdens.

Graph 2: "Medicare Advantage Insurers Made Nearly 50 Million Prior Authorization Determinations in 2023"

This trend highlights the increasing pressure on both payors and providers as they navigate a growing number of PA requests. As prior authorization activity continues to rise, the need for improved processes and collaboration becomes even more urgent.

Collaboration Strategies to Reduce Denials

Addressing the root causes of claim denials is crucial as healthcare’s share of the U.S. economy approaches 20% of GDP—some estimates placing it over 21%. A high concentration of economic activity in one sector can pose risks to broader resilience, especially during periods of market change or global disruption.

Payors argue that their utilization management practices are essential to controlling spending. However, administrative costs—representing around 20% of total healthcare expenditures—remain a significant concern, with prior authorization often cited as a resource-intensive process.

While automation and AI show promise, short-term improvements are more likely to come from enhanced collaboration between payors and providers. Many challenges stem from systemic complexity and fragmented communication—issues that technology alone can't resolve.

Recognizing that each stakeholder group operates under distinct pressures can help foster a more productive collaboration. For example, payors managing fixed budgets may implement controls to distribute resources responsibly. A shared understanding of these dynamics is key to driving effective solutions.

Moving Forward Through Collaboration

Improving the prior authorization process—and reducing denials more broadly—requires coordinated efforts grounded in transparency, accountability, and process simplification. Below are several strategies that support collaborative progress:

Key Strategies for Collaboration

Better Education

• Payors: Offer clear checklists and training resources, including procedure code guidance.
• Providers: Educate clinical and administrative teams on plan-specific requirements.
• Jointly: Conduct collaborative training sessions to address common challenges, such as documentation for specific procedures.

Simpler Documentation

• Payors: Provide standardized templates to support efficient submission.
• Providers: Focus on submitting relevant, necessary documentation.
• Jointly: Use prompts within EHR systems to reduce submission errors in real time.

Smoother Communication

• Payors: Increase visibility through improved case tracking tools and reviewer access.
• Providers: Respond to requests in a timely and complete manner.
• Jointly: Establish points of contact to streamline communication and reduce cycle times.

Improved Appeals Processes

• Payors: Communicate denial reasons with clarity and specificity.
• Providers: Use denial feedback to adjust submissions and reduce repeated issues.
• Jointly: Review patterns in overturned denials to identify and address systemic gaps.

While emerging technologies may support future efficiencies, meaningful change requires cross-sector collaboration and a shared commitment to operational alignment. The root challenges often stem not from a lack of tools, but from a lack of clarity and cohesion. As Mercurio observed, “We don’t have a widget problem—we have a language and connection problem.” Progress depends not just on digital solutions, but on building trust, improving communication, and aligning efforts across stakeholders.

Aligning for Efficiency: FHAS Is Here to Help

Prior authorization doesn’t have to be a barrier. By promoting collaboration, clear communication, and shared accountability between payors and providers, the process can be streamlined for better efficiency. The solution lies in aligning objectives, reducing friction, and building a system that supports patient care rather than hindering it.

FHAS is a valuable resource in this effort, offering insights, best practices, and strategies to optimize the prior authorization process. With our expertise and collaborative approach, we help stakeholders navigate complexities, improve workflows, and create a more efficient system.

Prioritizing transparency and mutual understanding is the first step toward reducing delays, denials, and burdens on both providers and patients.