Why Prior Authorizations Get Denied and What You Can Do About It

June 16, 2025

You submitted the right forms and listed the right codes, but your prior authorization (PA) was still denied. If that sounds familiar, you are not alone. Denials are a frequent frustration for solo practitioners, specialists, pharmaceutical group managers, and medical supply vendors. But often, there are valid reasons why these denials happen. Health insurance companies follow protocols and patterns that, when understood, can empower your practice or business to reduce the amount of denials received and, in short, understand the system.

While many providers and vendors have developed internal processes to manage the administrative burden of PAs, the truth is that every insurer is different. Staying up to date on their individual criteria can be overwhelming, but it doesn’t have to be. Let’s break down the PA process and discuss the common reasons PAs are denied and actionable solutions to prevent or mitigate these denials.

The Purpose of the Prior Authorization

Before we can discuss why PAs get denied, we need to understand why they exist in the first place.

Cost Control

At its core, PAs help to control healthcare costs. It’s a utilization management strategy insurers use to control and curb unnecessary or inappropriate treatments and prevent fraud. In the United States, the average MRI costs $1,325, but can be as high as $12,000, depending on the part of the body being imaged, the place of service (e.g., inpatient vs. ambulatory setting), medications used, and the region of the country the MRI is located, among others. If every person who ever had knee pain received an MRI of the Knee, you can imagine the health insurance system would collapse from the weight of these costs. This is where prior authorizations come in.

Insurers are also tasked with maintaining a balance between cost control and medical necessity. While the PA process is often viewed as a frustrating roadblock to patient care, it also protects patients from undergoing unnecessary procedures or receiving expensive medications with limited therapeutic value. Understanding this perspective can help you tailor your PA submissions more efficiently.

The Entities Involved

The PA process is often coordinated by multiple entities that each play a role within the process, including:

Health insurance companies
Pharmacy benefit managers
Utilization review companies
Providers and supplier offices (your team)
Patients

Common Services that Require Prior Authorization

PAs are frequently required for:

High-cost medications (e.g., biologics, specialty drugs)
Diagnostic imaging (i.e., MRI, CT, PET scans)
Sleep studies
Elective surgeries
Inpatient hospital stays
Durable medical equipment (e.g., CPAP machines, wheelchairs, nebulizers)

Knowing the common services that require PA is the first step in increasing approval odds and improving efficiency.

The Most Common Reasons for Denial

The most common reasons for denial can vary, some of which can be in your control to fix.

1. A cheaper option is available
Insurers are, at their root, cost-conscious. If a lower-cost alternative exists, they will push for it first. This could be a generic version of a drug or a different imaging modality.
Pro Tip: Check the insurer’s formulary or preferred alternatives before submitting the PA request. If the patient tried and failed the cheaper option, make sure to document it clearly.

2. Other options were not exhausted first
Insurers often require patients to try and fail other types of treatment before a more expensive option is considered. For a patient who has non-specific low back pain, six weeks of anti-inflammatories are often required first before advanced imaging can be approved.
Pro Tip: Make sure to include clinical notes that specify the other types of treatments that were tried and failed. Include the length of time, outcome, and any adverse effects.

3. The requested treatment/imaging is determined not to be medically necessary
Insurers often determine if a treatment or imaging is not medically necessary, as opposed to those that are necessary for the diagnosis or treatment of the patient’s medical condition and are standard practice. This is also where proper coding comes in. Ensure that the coding and/or differential diagnosis does not perceive the treatment or imaging as elective or cosmetic.
Pro Tip: Provide strong reasoning for the requested treatment or imaging, including how it ties to the patient’s condition. If the insurer uses a utilization review company, the company's guidelines are often available online. Review what is needed for the requested PA.

4. Missing/Incorrect/Incomplete information
Something as minor as a missing diagnosis code or an incomplete chart note can cause a PA to be denied. Common causes include:

Incomplete forms
Illegible notes/faxes
Incorrect CPT and/or ICD-10 codes
Missing provider NPI
Pro Tip: Create a checklist for PA submissions to ensure all areas are filled correctly and fully.

5. Medications are not on the approved list of covered drugs (e.g., non-formulary)
Unfortunately, some medications are not on the insurer’s list of covered drugs. Insurers typically update their formulary each year, if not sooner, so it’s unknown if the PA denial for this reason is temporary or permanent. In these cases, it is crucial to determine medical necessity and support your request with evidence specific to the patient. Did your patient fail previous formulary alternatives or is unable to tolerate them? Include clear documentation and if applicable, lab results, provider notes, or reports noting adverse events.
Pro Tip: Submit a formulary exception request with evidence showing medical necessity, or consider prescribing a more cost-effective alternative if clinically appropriate.

What Happens After a Denial?

A denial does not necessarily mean it’s the end of the road. You have options to appeal, but understanding the nuances of the appeals process will greatly increase your chances of a decision reversal.

How to File an Appeal

Find out why the claim was denied: Review the Explanation of Benefits (EOB) or denial letter to determine why the claim was denied.
Call the insurance provider: Confirm the reason for the denial and clarify if additional documentation would help a reversal.
Collect the right paperwork: Clinical notes, prior treatment records, lab results, formulary documents, and a letter of medical necessity is helpful when submitting an appeal.
Submit an internal appeal
Submit an external appeal

Internal Appeal

The first step of the appeal process is to appeal internally within the insurance company. The insurance company conducts a second review of the PA request, often by a peer clinician, such as a physician. To initiate and support this appeal, you will typically need to submit:

A formal appeal letter, including your name, the claim number, and the health insurance ID number
Any additional documentation to support the appeal
Any missing information from the original request

Note that submitting a request for an internal appeal is your right, but it typically is required to be done within 180 days (6 months) of receiving notice that the PA was denied. If the service or treatment is not completed yet, the insurance company must respond within 30 days. If the service or treatment has been completed, they will respond within 60 days. At the end of this time period, you will receive a written decision letter.

External Appeal

If the internal appeal is also denied, the next step is to file an external appeal, which is an independent review by a third party. The rules for external appeals vary by state and plan. Whatever the external reviewer decides, the insurer is required by law to accept the decision, which is provided no later than 45 days after the request was received.

Best Practices to Reduce Denials

Minimizing the chance for PA denials is not only about fixing errors, but about building a proactive system that anticipates insurer needs.

Electronic Prior Authorization (ePA)
ePA platforms help to streamline PAs by allowing real-time verification, status tracking, and instant submission. Many electronic medical record (EMR) systems now integrate with ePA tools, which reduce the turnaround time for PAs and increase the approval rate.

Automation and the Use of AI
AI is everywhere right now, including in PA submissions. AI automation of PAs increases efficiency, accuracy, and consistency. AI can integrate with EMRs to pull relevant data and automatically fill out and complete PA submissions. AI can also provide clinical insights on best practices, predict the likelihood of the claim getting approved, and meet insurer guidelines, increasing approval rates.

Standardized Intake Forms
Customizing forms to meet insurer requirements helps increase the rate of completeness and accuracy. Templates can ensure the right questions are being answered and can be tailored for imaging, medication, or procedure requests.

Conclusion

Prior authorization denials are frustrating, often delaying necessary patient care and putting excess burden on busy providers and vendors. In many cases, denials are preventable. By proactively understanding what insurers need and are looking for, you can align your documentation along with their requirements. AI isn’t going anywhere – it’s best to use it for your advantage. Technology and workflows reduce human error and can be a second pair of eyes to improve your approval rates. However, the PA process is not performed without effort. It doesn’t have to be chaotic either. Taking the time to strategically plan the PA process in your practice or business and paying attention to documentation can reduce burnout, reclaim time, and ensure your patients receive the care that they need.

Investment in staff training, adopting digital tools like ePA or AI automation, and becoming knowledgeable in insurer policies can only help you in the long run. Making these steps won’t only prevent unnecessary denials, it will protect your revenue, patient outcomes, and your piece of mind.

Alyssa Rojo, MSN, RN

References

Imaging Request: One Of The Most Common PAs You’re Probably Fighting Wrong How to Nail a Medication Prior Authorization

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