Prior Authorization

One-sentence definition: Prior authorization (PA) is a payer process that requires providers to obtain approval before delivering specific services, medications, or procedures — verifying medical necessity and coverage eligibility before the care is rendered.

Full Definition

Prior authorization is one of the primary mechanisms payers use to manage utilization and cost. When a provider intends to order a service or medication that the payer has designated as requiring PA, the provider must submit clinical information to the payer demonstrating that the service meets the payer’s criteria for coverage. The payer reviews the submission and either approves, denies, or requests additional information.

PA requirements vary widely by payer, plan, and service type. Some medications require PA because they are expensive or have lower-cost alternatives; some procedures require PA because of utilization management considerations; some durable medical equipment requires PA to confirm medical necessity. Payers publish PA requirement lists, but these change frequently and vary by benefit design.

The traditional PA process is administratively intensive: providers fax or call payers, payers manually review submissions, and turnaround times can take days. The AMA’s annual PA survey consistently finds that PA delays patient care, requires significant staff time, and leads providers to abandon treatments they believe are clinically appropriate.

Context and Usage

Where This Term Appears

• Provider workflows: Prior authorization requirements appear in EHR order entry workflows, often surfaced by CRD tools at the point of ordering
• Revenue cycle management: PA approval (or denial) directly affects whether a claim will be paid
• CMS rulemaking: CMS mandates electronic PA requirements for Medicare Advantage, Medicaid, and CHIP managed care plans
• Da Vinci IGs: The CRD, DTR, and PAS IGs collectively automate the PA workflow using FHIR

Common Usage Examples

In conversation: “The imaging center requires PA for MRIs — we need to submit clinical notes and the ordering provider’s attestation before scheduling.”

In documentation: “The payer’s CRD service returns a card indicating that prior authorization is required for procedure code 70553.”

Prior Authorization and FHIR

The Da Vinci Project’s CRD/DTR/PAS workflow digitizes the PA process end-to-end using FHIR:

• CRD (Coverage Requirements Discovery): at the moment a provider places an order, an EHR-integrated CDS Hooks service queries the payer and returns real-time information about whether PA is required
• DTR (Documentation Templates and Rules): if PA is needed, an embedded SMART app presents the provider with the exact clinical documentation the payer requires, populated from the EHR where possible
• PAS (Prior Authorization Support): the completed PA request is submitted to the payer via a FHIR transaction and the payer’s approval or denial is returned electronically

CMS finalized electronic PA requirements in the Interoperability and Prior Authorization final rule (CMS-0057-F), requiring impacted payers to implement the Da Vinci PA IGs by defined compliance dates.

Relationship to Other Terms

Related Terms

• CRD — Coverage Requirements Discovery: the Da Vinci IG that surfaces PA requirements at order time
• DTR — Documentation Templates and Rules: the Da Vinci IG for gathering PA documentation within the EHR
• PAS — Prior Authorization Support: the Da Vinci IG for submitting PA requests via FHIR
• CMS — the federal agency that regulates PA requirements for Medicare and Medicaid programs

Common Misconceptions

Misconception: Prior Authorization Is the Same as a Referral

• Incorrect belief: PA and referral are the same — a referral from a primary care physician is the prior authorization.
• Reality: A referral routes a patient to a specialist within a network and is a clinical coordination decision. Prior authorization is a payer approval process for a specific service or medication and is a utilization management decision. Some payers require both; they are separate administrative processes.
• Why it matters: Conflating the two leads to gaps in administrative workflow — obtaining a referral doesn’t mean a covered service doesn’t still require PA.

Misconception: An Approved PA Guarantees Payment

• Incorrect belief: If a payer approves a prior authorization, the claim will be paid.
• Reality: PA approval confirms medical necessity for the proposed service under specific conditions. A claim can still be denied after PA approval if other conditions aren’t met: the service was rendered by an out-of-network provider, the patient’s coverage lapsed, the service differed from what was authorized, or other coverage policy criteria weren’t satisfied.
• Why it matters: Revenue cycle teams need to verify coverage, network status, and other claim conditions even when PA is in hand.

Why Prior Authorization Matters

Prior authorization sits at the intersection of clinical care and health plan administration. Delays in PA directly affect patient access to care — delayed medications, postponed procedures, and abandoned treatments. Automating the PA workflow with FHIR reduces administrative burden on providers and payers alike, and regulators have recognized this by mandating electronic PA requirements. For any team building payer-provider integration, understanding the PA workflow is essential context.

Cross-References

Related Glossary Terms

• CRD — Coverage Requirements Discovery: the Da Vinci IG that surfaces PA requirements at order time
• DTR — Documentation Templates and Rules: the Da Vinci IG for gathering PA documentation
• PAS — Prior Authorization Support: the Da Vinci IG for submitting PA requests via FHIR
• CMS — the federal agency that regulates prior authorization requirements for Medicare and Medicaid

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Last reviewed: February 3, 2026 Definition authority: CMS / Internal Content status: Canonical reference