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February 6, 2026
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Prior Authorization
February 11, 2026
The prior authorization and revenue cycle landscape is drowning in jargon. FHIR, CRD, DTR, CO-197, ePA– the alphabet soup is overwhelming and constantly evolving as new regulations reshape workflows.
This complexity creates real problems. Teams waste time translating between payer requirements, vendor language, and internal processes. Misunderstandings delay care. And when everyone speaks a different language, building efficient workflows becomes nearly impossible.
That's why we created this guide.
Your definitive reference for RCM and prior authorization terminology, organized into five thematic sections covering everything from PA fundamentals to regulatory compliance. Browse alphabetically within each section or jump directly to the topics most relevant to your work. Look for Humata Insights where we share perspectives on industry best practices and emerging approaches.
Bookmark this. Share it with your team. Use it as your go-to reference for navigating the complex world of prior authorization.
The process by which a payer reviews a prior authorization request or claim to determine approval, denial, or need for additional information. The payer evaluates against coverage policies, medical necessity criteria, and member eligibility.
The percentage of prior authorization requests that receive approval on the first submission without requiring additional information, appeals, or resubmission. A high approval rate indicates complete documentation and strong alignment with payer policies.
A requirement from a health insurance payer to review and approve a medical service, procedure, or medication before it is delivered to ensure medical necessity and coverage compliance.
A payer's decision to reject a prior authorization request or claim, preventing payment or approval for the requested service. Denials may result from incomplete documentation, failure to meet medical necessity criteria, lack of authorization, or administrative errors.
A prior authorization request that is approved on the initial submission without requiring additional documentation, clarification, or resubmission. First-pass approvals reduce administrative burden, accelerate care delivery, and minimize scheduling delays.
💡Organizations achieving 95%+ first-pass approval rates typically use AI-powered clinical bundling that automatically aligns documentation with payer policies before submission, ensuring completeness and reducing pends.
A prior authorization process designed to eliminate administrative burden and delays through intelligent automation, real-time connectivity, and complete transparency.
Frictionless PA minimizes manual touchpoints, accelerates decision timelines, and ensures seamless information flow between providers and payers, allowing care to move forward without unnecessary obstacles
A payer program that exempts high-performing providers from prior authorization requirements for specific services or procedures. Providers earn gold-card status by demonstrating consistently high approval rates and adherence to medical necessity criteria, reducing administrative burden for both parties.
💡Qualifying for gold-card programs requires demonstrating consistently high approval rates over time. Maintaining detailed audit trails and performance metrics helps organizations build the case for exemption status with payers.
The requirement that a medical service, procedure, or medication is appropriate, evidence-based, and required to diagnose or treat a patient's condition. Payers use medical necessity as the primary criterion for prior authorization approval, often referencing clinical guidelines and coverage policies.
A designation indicating that a specific service, procedure, or medication does not require prior authorization approval from the payer. NAR determinations are based on payer policies, plan type, provider network status, or service characteristics.
💡Automated requirement checks at order entry can identify NAR cases immediately, eliminating 20-40% of potential authorization requests before they enter the workflow and freeing staff to focus on cases that truly require review.
Medicare policies that define whether and under what circumstances specific services are covered. National Coverage Determinations (NCDs) apply nationwide and supersede Local Coverage Determinations (LCDs), which are established by regional Medicare Administrative Contractors and vary by jurisdiction.
A conversation between the ordering provider and the payer's medical director to discuss clinical rationale when a prior authorization request is denied or pending. Peer-to-peer reviews allow providers to present additional context and evidence to support medical necessity.
A payer status indicating that a prior authorization request requires additional clinical documentation or clarification before a determination can be made. Pending cases extend turnaround times and delay care delivery until the provider submits the requested information.
Pre-service authorization is approval obtained before delivering a service, while post-service (or retrospective) authorization is requested after care has been provided. Most payers require pre-service authorization, though retrospective requests may occur for urgent care or administrative errors.
A prior authorization request submitted after a service has already been delivered, typically due to urgent clinical circumstances, administrative oversight, or unclear payer requirements. Retro authorization carries higher denial risk and may result in payment disputes or write-offs.
A prior authorization request that is processed and approved automatically without manual staff intervention, using AI, automation, and real-time payer connectivity. Touchless authorization eliminates administrative burden and accelerates care delivery for routine, policy-compliant cases.
💡Achieving 90%+ touchless rates requires combining real-time payer connectivity with intelligent routing that handles routine, policy-compliant cases automatically, allowing staff to focus exclusively on complex exceptions requiring clinical judgment
A set of payer processes designed to ensure that healthcare services are medically necessary, appropriate, and cost-effective. Utilization management includes prior authorization, concurrent review, case management, and retrospective review to control costs and optimize care quality.
The use of artificial intelligence and machine learning to analyze clinical documentation, extract relevant evidence, and evaluate prior authorization requests against payer policies. AI-powered review automates routine determinations, identifies missing documentation, and flags cases requiring human oversight.
The Impact: AI clinical review dramatically reduces the time required to process authorization requests. What once took staff 20-30 minutes per case can now happen in seconds, enabling exception-based workfiows where staff focus only on complex cases.
A set of protocols that allow different software systems to communicate and exchange data in real-time. In prior authorization, APIs enable direct connections between EHRs, clearinghouses, and payer systems, eliminating manual data entry and enabling automated submission and status checking.
The Impact: API-based connectivity is replacing slower, manual processes like portal logins, phone calls, and fax. Real-time API connections enable instant requirement checks, automated submissions, and live status updates, reducing turnaround times from days to minutes for many authorization types.
Technology that mimics human actions to complete repetitive digital tasks such as logging into payer portals, navigating workflows, uploading documents, and extracting status information. RPA combined with intelligent automation handles high-volume, rules-based PA processes without manual intervention.
The Impact: Staff spend countless hours on repetitive tasks like checking authorization statuses across multiple payer portals or submitting the same information through different interfaces. Automation eliminates this manual work, reduces errors, and allows teams to focus on cases requiring clinical judgment or complex problem-solving.
💡Modern automation solutions combine RPA with AI to adapt to payer portal changes, correctly route multi-page attachments, and extract data from unstructured sources– creating truly hands-off workflows for routine authorizations
An HL7 Da Vinci FHIR implementation guide that enables EHRs to query payers in
real-time at the point of order entry to determine if prior authorization is required and what documentation or alternative treatments are needed.
The Impact: CRD moves the "Is PA needed?" question upstream, eliminating the reactive scramble that happens when staff discover authorization requirements during scheduling. Real-time requirement discovery at order entry prevents delays, reduces unnecessary PA workload, and gives providers and patients immediate clarity on next steps.
An HL7 Da Vinci FHIR guide that delivers payer-specific questionnaires and automatically populates required clinical data from the EHR to support prior authorization requests. DTR ensures complete, policy-aligned documentation before submission.
The Impact: Incomplete or misaligned documentation is the primary cause of authorization pends and denials. DTR guides staff through exactly what each payer needs, pulling data directly from the EHR when possible, dramatically increasing first-pass approval rates and reducing back-and-forth cycles
An operational model where routine, rules-compliant tasks are handled automatically, and human staff intervene only when cases require clinical judgment, complex
problem-solving, or escalation. Exception-based PA workflows use automation and AI to process straightforward cases touchlessly.
The Impact: Traditional PA workflows require staff to touch every case, regardless of complexity. Exception-based workflows flip this model: automation handles 80-90% of routine cases, allowing specialized staff to focus their expertise exclusively on the 10-20% that truly need human intervention– improving both efficiency and job satisfaction.
💡Organizations operating exception-based workflows allow authorization specialists to spend their time on appeals, peer-to-peers, and complex clinical scenarios rather than routine data entry, with automation handling the majority of straightforward cases.
A modern API and data standard developed by HL7 that enables real-time data exchange between healthcare systems. FHIR powers the Da Vinci implementation guides (CRD, DTR, PAS) that are transforming prior authorization through structured, API-based connectivity.
The Impact: FHIR represents a fundamental shift from batch-based, overnight file exchanges to real-time, transactional data sharing. For prior authorization, FHIR enables instant requirement checks, automated submissions, and live status updates– infrastructure that simply wasn't possible with legacy EDI standards.
A collaborative initiative within HL7 International that develops FHIR-based implementation guides to support value-based care, including prior authorization. The Da Vinci Project created the CRD, DTR, and PAS standards that enable real-time, API-based communication between providers and payers for authorization workflows.
The Impact: The Da Vinci guides translate regulatory mandates (like CMS-0057) into practical technical specifications that EHR vendors and payers can actually implement. Without Da Vinci, each organization would build proprietary APIs, creating fragmentation. Da Vinci provides the common language that makes interoperable prior authorization possible.
The ability of different healthcare IT systems– EHRs, payer portals, clearinghouses, and vendor solutions– to exchange, interpret, and use data seamlessly. Interoperability in prior authorization enables automated data flow between providers and payers, reducing manual re-entry and errors.
The Impact: Lack of interoperability forces staff to manually copy information between systems, increasing errors and wasting time. True interoperability means authorization data flows automatically from EHR to payer and back, with statuses, approvals, and denial reasons updating in real-time across all systems without human intervention.
A branch of artificial intelligence that enables computers to understand, interpret, and extract meaning from human language in clinical notes, policies, and unstructured documents. In prior authorization, NLP extracts relevant clinical evidence from charts and maps it to payer criteria.
The Impact: Clinical information lives in unstructured narrative notes, not discrete data fields. NLP allows systems to "read" physician documentation just as a human would– finding the specific HbA1c value, therapy timeline, or imaging finding buried in hundreds of pages– and automatically assemble evidence packets that meet payer requirements.
💡Modern NLP systems can identify not just what information is present in clinical documentation, but also what's missing relative to payer requirements, flagging gaps before submission and reducing the pend rate significantly.
Direct, API-based connections between provider systems and payer portals that enable instant data exchange for authorization requirements, submissions, and status updates. Real-time connectivity eliminates the delays inherent in batch processing, portals, and phone-based communication.
The Impact: Traditional PA processes rely on asynchronous communication– portals checked manually, faxes sent and received, phone calls placed during business hours. Real-time connectivity collapses these delays: requirement checks happen instantly at order entry, submissions process in seconds, and status updates flow back automatically without staff intervention.
💡Organizations with real-time payer connectivity for their top payers see significant reductions in average authorization turnaround time, with many routine cases receiving instant determinations that would have taken days through traditional channels
A formal request to overturn a payer's denial of a prior authorization or claim. Appeals typically involve submitting additional clinical documentation, medical rationale, or evidence to demonstrate that the service meets medical necessity criteria and coverage requirements
Standardized codes used by payers on remittance advice to explain why a claim was denied, reduced, or adjusted. CARCs provide specific reasons for payment decisions, enabling providers to identify patterns, address root causes, and determine appropriate next steps for resolution.
A claim or prior authorization request submitted with complete, accurate information that meets all payer requirements and can be processed without additional documentation or clarification. Clean claims reduce processing time, minimize denials, and accelerate payment.
💡Achieving consistently clean submissions requires aligning documentation with payer-specific requirements before submission. Organizations that automate policy checks and evidence bundling see significant improvements in clean claim rates and first-pass approvals.
An intermediary organization that receives, validates, and routes electronic transactions (claims, prior authorizations, eligibility checks) between providers and payers.
Clearinghouses standardize data formats, check for errors, and facilitate connectivity across multiple payers.
A claim adjustment reason code indicating that a claim was denied because required prior authorization was missing, invalid, or expired. CO-197 denials are preventable through proper authorization tracking, validation, and post-authorization monitoring.
💡CO-197 denials typically result from authorization-to-service mismatches: wrong CPT codes, expired validity periods, or services rendered outside authorized parameters. Automated post-authorization monitoring can flag these discrepancies before claims are submitted, preventing write-offs.
The process of determining which health insurance plan pays first when a patient has coverage from multiple insurers. COB affects prior authorization requirements, as primary and secondary payers may have different authorization rules and timeframes.
The systematic process of identifying, analyzing, appealing, and preventing claim and authorization denials. Effective denial management includes root cause analysis, staff training, process improvements, and technology solutions to reduce denial rates and recover lost revenue.
The percentage of prior authorization requests or claims that are rejected by payers. High denial rates indicate issues with documentation quality, policy alignment, or authorization processes, directly impacting revenue and requiring additional administrative work.
The process of tracking approved prior authorizations and identifying changes to service details (CPT codes, dates, quantities, site of service) that could invalidate the authorization and trigger claim denials. Post-auth monitoring prevents CO-197 denials by flagging mismatches before services are rendered.
💡Automated post-authorization monitoring systems continuously compare scheduled services against authorization parameters, alerting staff to discrepancies in real-time and enabling proactive resolution before patients arrive or claims are submitted.
A document (paper or electronic) from a payer explaining payment decisions for submitted claims, including paid amounts, adjustments, denials, and reason codes. Remittance advice enables providers to reconcile payments, identify denial patterns, and determine necessary follow-up actions
A situation where a payer reimburses less than the expected or contracted amount for a service. Underpayments may result from authorization mismatches, incorrect coding, contract interpretation disputes, or payer processing errors, requiring investigation and potential appeal.
The detailed medical records, notes, test results, and evidence created by healthcare providers to support patient care decisions and demonstrate medical necessity for services. In prior authorization, clinical documentation must clearly show that requested services meet payer criteria and evidence-based standards.
💡AI-powered systems can extract relevant clinical evidence from hundreds of pages of documentation in seconds, automatically identifying the specific lab values, therapy histories, and diagnostic findings that payers require– eliminating hours of manual chart review.
A systematic process to ensure medical records accurately and completely reflect the patient's clinical status, severity of illness, and services provided. Strong CDI practices improve prior authorization outcomes by ensuring documentation clearly supports medical necessity and meets payer requirements.
Evidence-based recommendations developed by medical societies, government agencies, or standards organizations that define appropriate care for specific conditions. Payers reference clinical guidelines when establishing medical necessity criteria and evaluating prior authorization requests.
The practice of making clinical decisions based on the best available scientific research, clinical expertise, and patient values. Payers use evidence-based medicine principles to determine which services warrant prior authorization approval and establish medical necessity standards.
Standardized medical coding systems used to document diagnoses (ICD-10) and procedures/services (CPT). Accurate coding is essential for prior authorization, as payers use specific code combinations to determine coverage requirements, medical necessity, and appropriate reimbursement levels.
Evaluation of a prior authorization request by a physician employed or contracted by the payer to assess clinical appropriateness and medical necessity. Medical director review typically occurs for complex cases, denials requiring peer-to-peer discussion, or services falling outside standard criteria.
The specific clinical standards and requirements that payers use to determine whether a requested service, procedure, or medication is appropriate and covered. Medical necessity criteria may reference clinical guidelines, evidence-based research, plan policies, or commercial criteria sets
💡Automated systems that decompose payer medical necessity criteria into discrete requirements and match them against clinical documentation in real-time can identify gaps before submission, dramatically reducing pends and denials.
A payer's formal coverage determination document that defines when specific services, procedures, or medications are considered medically necessary and eligible for reimbursement. Medical policies establish the framework for prior authorization requirements and approval decisions.
Initial evaluation of prior authorization requests by registered nurses or clinical staff who apply payer criteria and protocols to determine if cases can be approved immediately or require escalation to medical director review. Nurse review handles the majority of routine authorization determinations.
The clinical records, test results, imaging reports, treatment histories, and other evidence submitted alongside a prior authorization request to demonstrate medical necessity.
Complete supporting documentation increases first-pass approval rates and reduces payer requests for additional information.
💡Organizations that automate clinical bundling– intelligently selecting and organizing only the relevant supporting documentation based on payer-specific requirements– see significant improvements in first-pass approval rates and reductions in manual rework.
Federal healthcare reform legislation enacted in 2010 that expanded insurance coverage, established consumer protections, and introduced administrative simplification provisions affecting prior authorization. The ACA's medical loss ratio requirements and benefit standardization influenced payers' increased reliance on utilization management and prior authorization.
The Impact: The ACA fundamentally reshaped the prior authorization landscape by constraining other cost-control mechanisms and driving payers toward PA as a primary utilization management tool. Understanding ACA provisions helps explain why PA volume expanded dramatically post-2010 and why current reform efforts focus on reducing administrative burden.
The federal agency within the Department of Health and Human Services responsible for administering Medicare, Medicaid, and the Children's Health Insurance Program. CMS establishes coverage policies, payment rules, and regulatory requirements that often set standards adopted by commercial payers.
The Impact: CMS regulations define the compliance baseline for prior authorization in federal programs and frequently influence commercial payer practices. CMS mandates on interoperability, transparency, and decision timelines are reshaping PA infrastructure across the entire healthcare system, not just government programs.
A 2024 CMS regulation requires most federal program payers to implement FHIR APIs for prior authorization (CRD, DTR, PAS), publish transparent decision rationales, and meet shortened determination timelines (72 hours urgent, 7 days standard) by 2026-2027.
The Impact: CMS-0057 establishes hard compliance deadlines that are forcing payers to modernize PA infrastructure and adopt standardized APIs. For providers, this means the fragmented portal-and-phone landscape is transitioning toward structured, API-based workflows– but only if both sides meet implementation timelines.
💡Organizations preparing for CMS-0057 compliance are prioritizing EHR integration strategies that can support FHIR-based workflows where available while maintaining legacy channel connectivity for payers still transitioning to the new standards.
A CMS regulation mandating adoption of NCPDP SCRIPT standard version 2023011 for all Medicare Part D electronic prescribing transactions by January 1, 2028, fully retiring the older 2017071 standard and modernizing pharmacy benefit prior authorization workflows.
The Impact: CMS-4205 standardizes electronic prior authorization for prescription drugs, eliminating version fragmentation that created compatibility issues between prescriber systems and PBMs. The mandate ensures consistent, real-time pharmacy PA workflows across all Part D plans, reducing manual fallback to phone and fax.
💡The transition to SCRIPT 2023011 enables more sophisticated data exchange for specialty medications and complex prior authorization scenarios, supporting better documentation of medical necessity and reducing approval delays for high-cost therapies.
A joint federal-state program providing health coverage to low-income individuals, with states administering benefits and establishing their own prior authorization policies within federal guidelines. Medicaid PA requirements vary significantly by state, creating complexity for multi-state providers.
The Impact: Medicaid programs often have the most restrictive prior authorization requirements and shortest approval timelines. State-specific variations mean providers must navigate 50+ different policy landscapes, making automation and policy management tools essential for organizations serving Medicaid populations.
Private health insurance plans approved by Medicare to provide Medicare benefits through managed care arrangements. Medicare Advantage plans use prior authorization more extensively than traditional Medicare, with PA determinations growing from 37 million in 2019 to 50 million in 2023.
The Impact: Medicare Advantage PA practices face increasing federal scrutiny for inappropriate denials and delayed decisions. CMS has tightened oversight and shortened required determination timelines (72 hours urgent, 7 days standard), making efficient PA workflows essential for MA plans and the providers serving their members.
The legal agreement between a healthcare provider or organization and an insurance payer defining reimbursement rates, covered services, quality metrics, and administrative requirements including prior authorization obligations. Payer contracts establish which services require PA and outline determination timelines.
The Impact: Contract language directly impacts PA workload and revenue risk. Understanding contractual PA requirements, appeal rights, and performance expectations enables providers to negotiate better terms, allocate resources appropriately, and hold payers accountable to agreed-upon standards.
The principle that prior authorization processes, requirements, and decisions should be clear, accessible, and understandable to both providers and patients. Transparency initiatives include publishing PA lists, decision rationales, approval metrics, and standardized determination criteria.
The Impact: Lack of transparency forces providers to operate blind– guessing at requirements, unable to predict outcomes, and struggling to improve performance. Regulatory mandates increasingly require payers to publish clear PA criteria and explain denial rationales, enabling providers to submit complete requests and reducing unnecessary back-and-forth.
💡Solutions that maintain comprehensive, continuously updated policy libraries and provide visibility into approval patterns help organizations operate effectively even when payer transparency remains inconsistent across products and regions.
CMS payment model introduced to identify and reduce inappropriate billing and utilization in traditional Medicare through technology-enabled claims review. WISeR allows payers to use AI and advanced analytics to detect patterns of wasteful or clinically unnecessary services, with the goal of improving care quality and reducing improper payments.
The Impact: WISeR establishes a regulatory framework for technology-driven utilization management in Medicare fee-for-service, a program that historically relied less on prior authorization than Medicare Advantage. The model defines how AI can be deployed in utilization review while maintaining beneficiary protections and provider due process rights.
Renown Health and Humata Partnered to Transform the Prior Authorization Process with the use of Automation & AI
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