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Prior authorization is a revenue problem that starts in the clinic

Prior authorization delays hold up care and cash at the same time, and the work that causes them sits between clinics, payers and patients. Leading medical groups are managing each authorization as an obligation with an owner, a deadline and a cost for every day it stays open.

HealthcareSegeta Insights
Healthcare
The number$$94K

a day of slow authorizations for a 300-physician group

What is at stake

A month of slow authorizations can cost a 300-physician group about $$2 million.

Where days are lost
  1. Order to submission
  2. Payer request for more information
  3. Denial to appeal and resubmission

Most health systems still file prior authorization under administrative burden, a cost of doing business absorbed by front-office staff and measured in hours. In practice, each authorization is a chain of obligations between the ordering clinic, the payer and the patient, and that chain decides when the service is scheduled, whether the claim is clean and when cash arrives. The revenue cycle therefore begins at the order, well before the first claim is coded or billed.

The scale of the work makes that chain hard to manage by hand. Physicians complete an average of 40 prior authorizations a week, which consume about 13 hours of physician and staff time, and 95 percent say the process delays access to necessary care, according to an American Medical Association (AMA) survey of 1,000 physicians published in May 2026.1 The sections that follow trace prior authorization delays through three handoffs, estimate what a day of delay costs a large multi-specialty group and set out five actions for revenue cycle leaders.

Federal rules and payer pledges are moving faster than clinic workflows

Regulators and payers have both promised faster decisions. Under the CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F), Medicare Advantage, Medicaid and CHIP plans must decide urgent requests within 72 hours and standard requests within seven calendar days from 2026, and most API requirements apply from January 1, 2027; CMS estimates savings of about $$15 billion over ten years.2 In June 2025, health plans covering 257 million Americans pledged to reduce the services that need authorization, honor existing authorizations for 90 days after a plan change and answer 80 percent of electronic approvals in real time by 2027.3

Medical groups have yet to feel much difference in daily operations. In a September 2026 MGMA Stat poll, 44 percent of medical group leaders said payer turnaround had become slower in 2026 and only 7 percent said it was faster, while 61 percent of practices had staff logging in to seven or more payer portals each week.4 Only 33 percent of physicians in the AMA survey expect the pledge to make a meaningful difference.1 Volume remains high as well, since Medicare Advantage insurers made 52.8 million prior authorization determinations in 2024.5

Prior authorization delays build up at three handoffs

Each authorization passes between at least three parties, and each handoff can sit in an inbox, a fax queue or a payer portal without a named owner. In Experian Health's 2025 survey, 41 percent of providers reported claim denial rates of 10 percent or higher, and 35 percent named authorizations among the leading causes of denials.6

Nineteen in twenty physicians say prior authorization delays access to necessary care.

Exhibit 1Nearly all physicians say prior authorization delays access to careShare of physicians reporting each effect of prior authorization, 2026 survey, percent
Delays necessary care95
Patients abandon care79
Has dedicated PA staff40
Expects pledge to help33
Led to serious harm26

Source: American Medical Association, prior authorization physician survey, May 2026

01Order to submission

The physician orders an MRI, an infusion or a procedure in the EHR, and a coordinator must check the payer's rules, gather clinical notes and submit through one of many portals. Delay starts when the order lacks the documentation the payer requires, or when nobody notices that a service needs authorization until the patient is already on the schedule.

02Payer request for more information

A pended request comes back as a fax, a portal message or a phone call asking for imaging reports or evidence of failed first-line therapy, often to a shared inbox. Each day that the request sits unanswered adds a day to the patient's wait and to the group's cash cycle.

03Denial to appeal and resubmission

In Medicare Advantage, insurers denied 7.7 percent of requests in 2024, providers appealed only 11.5 percent of those denials, and 80.7 percent of appeals were overturned.5 Premier estimates that providers spent $$57.23 to adjudicate each contested claim in 2023, a cost that may lead groups to let small denials lapse and write off revenue that an appeal would likely have recovered.7

A connected operating model manages each authorization as an obligation

Leading medical groups are beginning to treat each authorization as an obligation with an owner, a deadline and a cost for every day it stays open. A live layer reads the systems already in use, including the EHR, scheduling, practice management and billing, payer portals, fax and email, and runs a four-step loop:

  1. Detect

    an order that needs authorization at the moment it is signed, and a payer request for records on the day it arrives.

  2. Explain

    which payer rule, missing document and scheduled appointment the gap affects, with the expected value of the service attached.

  3. Recommend

    the next step and its owner, such as attaching a prior imaging report, requesting a peer-to-peer review or moving the appointment.

  4. Execute and track

    each submission, response and appeal to closure, measuring days to decision and revenue released.

The same record can give patients plain-language status updates by text or WhatsApp, and give payers complete submissions through the APIs that CMS-0057-F requires from 2027. Artificial intelligence does the reading of clinical notes and payer policies, the linking of orders to rules and the drafting of submissions and appeal letters, while clinicians and revenue cycle staff remain accountable for every clinical statement and every decision to appeal.

Prior authorization delays can cost a 300-physician group about $$94,000 a day

The cost of a day in prior authorization is the revenue lost, the denial rework and the staff time consumed for each working day that authorizations wait between clinic, payer and patient.

A month of slow authorizations can cost a 300-physician group about $$2 million.

Exhibit 2. Estimated daily cost of prior authorization delays for a composite 300-physician multi-specialty group

ComponentBasisEstimate per day
Physician and staff time300 physicians at 13 hours a week 1, or about 780 hours a working day; assumes a blended cost of $$45 an hourAbout $$35,100
Revenue lost to abandoned careAbout 2,400 requests a working day at 40 a physician a week 1; assumes 2 percent end in abandoned treatment at an average allowed amount of $$1,000About $$48,000
Denial reworkAbout 185 denials a day at the 2024 Medicare Advantage denial rate of 7.7 percent 5, applied to all payers as an assumption; $$57.23 per contested claim 7About $$10,600
Total per working daySum of the three componentsAbout $$94,000

Source: Segeta estimate based on AMA, KFF and Premier data; assumptions are illustrative.

On these assumptions, 30 calendar days, or about 21 working days, put about $$2.0 million at risk, and 60 days about $$3.9 million. The estimate excludes services that are delivered late, which raise working capital needs as cash arrives weeks after the order. Appeals offset part of the exposure, since more than eight in ten Medicare Advantage appeals succeed, and payer compliance with the CMS decision deadlines could shorten waits from 2026 if clinics answer payer requests as quickly.5

What revenue cycle leaders can do now

  1. 01Start the authorization at the order

    Configure the EHR to flag services that need authorization when the physician signs the order, and route each one to a named coordinator with a due date.

  2. 02Measure turnaround by payer and service line

    Track the days from order to submission, from submission to decision and from denial to appeal, and compare them with the 72-hour and seven-day limits under CMS-0057-F.

  3. 03Answer payer requests within one working day

    Assign every pended request to an owner, because a request for records that waits in a shared inbox extends the patient's wait and delays the claim.

  4. 04Appeal the denials that payers usually overturn

    Use payer-level overturn data, including the metrics that plans must publish under the CMS rule, to decide which denials to contest, since most Medicare Advantage appeals succeed.

  5. 05Price each open authorization in dollars per day

    Attach the expected service revenue to every pending request, so that finance and clinic leaders discuss the backlog in the same terms.

Medical groups cannot set payer rules or response times on their own, yet they control how quickly an order becomes a complete submission and a denial becomes an appeal. Groups that manage every authorization as a live, priced obligation are likely to deliver care sooner and collect cash earlier as the 2026 and 2027 federal deadlines take effect.

Questions leaders ask

What causes prior authorization delays?

Most delays arise at handoffs between the clinic, the payer and the patient. An order may reach the payer without the documentation it requires, a payer request for more records may wait in a shared inbox, or a denial may never be appealed. Physicians complete about 40 requests a week, so small gaps in ownership add up to days of waiting.

How long do payers have to decide prior authorization requests under CMS-0057-F?

From 2026, Medicare Advantage, Medicaid and CHIP plans must decide urgent requests within 72 hours and standard requests within seven calendar days. Plans must also give a specific reason for denials and publish prior authorization metrics, and most API requirements, including a Prior Authorization API, apply from January 1, 2027.

How often are Medicare Advantage prior authorization denials overturned?

KFF found that Medicare Advantage insurers denied 7.7 percent of 52.8 million prior authorization determinations in 2024. Providers appealed only 11.5 percent of those denials, yet 80.7 percent of appeals were overturned. The gap suggests that many medical groups leave recoverable revenue on the table when they lack the capacity to appeal.

How much do prior authorization delays cost a medical group?

On illustrative assumptions, a composite 300-physician multi-specialty group could lose about $$94,000 each working day to staff time, abandoned care and denial rework. Over 30 calendar days the exposure approaches $$2 million. The estimate excludes the working capital cost of services that are delivered and paid weeks later.

Notes and sources
  1. American Medical Association, "AMA survey: Prior authorization reform pledge falls short with physicians," press release, May 2026, ama-assn.org.
  2. Centers for Medicare & Medicaid Services, "CMS finalizes rule to expand access to health information and improve the prior authorization process," press release, January 2024, cms.gov.
  3. Healthcare Financial Management Association, "Insurers promise to make prior authorization processes easier for all parties," HFMA, June 2025, hfma.org.
  4. MGMA, "Fewer than 1 in 10 see prior auth turnarounds faster," MGMA Stat, September 2026, mgma.com.
  5. KFF, "Medicare Advantage insurers made nearly 53 million prior authorization determinations in 2024," January 2026, kff.org.
  6. Experian Health, 2025 State of Claims, as reported in "What's to blame for claim denials?," Becker's Hospital Review, September 2025, beckershospitalreview.com.
  7. Michael J. Alkire, Soumi Saha and Mason Ingram, "Claims adjudication costs providers $$25.7 billion; $$18 billion is potentially unnecessary expense," Premier Inc., February 2025, premierinc.com.