Get the facts: Why is prior authorization needed?

Prior authorization is an important checkpoint that helps minimize the chances you’ll receive an unexpected medical bill, but it’s not required for most types of care.

Checkpoints exist throughout the American health care system. They ensure people receive appropriate care and avoid preventable errors in treatment or diagnoses. While doctors and hospitals manage most of these checkpoints, health insurers also play a role. The most familiar example is prior authorization, a process through which health plans verify the care people receive is safe, effective and covered by their health plan before they undergo a procedure or surgery, which also makes it an important tool to ensure bills don’t come as a surprise to patients.

Prior authorization is one of the few tools available to help prevent losses from wasteful overtreatment and low-value care, which are far too common in our health care system, resulting in $76 billion to $101 billion in unnecessary costs every year.¹

For all the recent noise around prior authorization, the reality is it’s rarely used. When our members seek care, more than 99% of the time,² they either do not need prior approval or the approval is quickly obtained. Our commitment to responsible use of prior authorization is evidenced by our performance in CMS’s most recent program audit of our utilization management practices in September 2024, which found no areas in need of corrective actions.³

UnitedHealthcare most frequently uses prior authorization in the following scenarios:

• A diagnosis presents multiple treatment options that vary in quality, outcomes and cost: For example, many procedures that used to require inpatient stays in hospitals can now take place in outpatient facilities where operating costs are lower, quality outcomes are as good or better than at inpatient facilities, stays are shorter, and risks of hospital-acquired infections are reduced. In addition, some conditions that can be treated with surgery may also be effectively treated with physical therapy, potentially saving the patient hundreds of dollars in out-of-pocket costs. In these cases, UnitedHealthcare relies on the latest clinical literature and evidence-based recommendations. The process is open and transparent, with all of our guidelines posted online and available to the public. Over time, when clinical guidelines become the standard of care for certain services and treatments, and variation in care is reduced, prior authorization may no longer be needed to ensure patient safety, quality and affordability.
• Generally accepted care guidelines have evolved: This scenario could occur when new treatment guidelines for chronic conditions are released, when the FDA approves the use of existing drugs to address new conditions, or when updated recommendations on the appropriate use of imaging, such as X-rays and CT scans, are issued. In these situations, UnitedHealthcare focuses on helping providers understand what’s changed and the additional information they may need to submit when they order an imaging test, for example. This additional support for providers typically leads to higher prior authorization approval rates and a decrease in appeal rates.
• A procedure or medication comes with a high price tag: The purpose of prior authorization in this scenario is to ensure the member is receiving the safest and most appropriate treatment or service, according to widely accepted clinical guidelines, and that everyone is clear on what’s covered before treatment begins.

People may be surprised to learn that scenarios where prior authorization often comes into play are relatively rare. Only 26% of the provider groups we work with submitted more than one prior authorization request of any kind per year over the last two years.² And very few of our members (less than 2%) whose care does require prior authorization see requests denied. 

Nonetheless, we recognize doctors and members alike are asking for streamlined prior authorization requirements, so we are working to modernize the process.

• In 2023, we took the significant step of eliminating the requirements for nearly 20% of our prior authorization volume, particularly in cases where there was minimal variation in care across the more than 7,000 hospitals in our network. We’ve also reduced the number of services subject to prior authorization for our Medicare Advantage members by 40% since 2016.² We will continue to regularly evaluate codes requiring prior authorization to identify instances where it is no longer needed to promote patient safety, quality and affordability.
• We introduced a first-of-its-kind national Gold Card Program in 2024, which recognizes provider groups who consistently adhere to evidence-based care guidelines by exempting them from prior authorization requirements for many procedures. Groups of doctors need to submit at least 10 eligible prior authorization requests each year for two consecutive years and achieve at least a 92% approval rate to qualify.

We are also investing in meaningfully advancing capabilities that simplify and streamline the consumer and provider experience in this area, including increasing the use of electronic submission of prior authorization requests, which enables a much faster response to the provider. As these initiatives progress, patients and providers alike can expect an even smoother, more efficient and more transparent experience that brings the focus where it belongs: delivering the high-quality care patients deserve.