Why CFOs and Clinical Leaders Should Jointly Reevaluate Prior Authorization as a Clinical and Financial Strategy

Prior authorization (PA) has traditionally been viewed as a clinical function, but the most effective health plans recognize that it is an enterprise-wide capability requiring collaboration across Clinical, Quality, Operations, Compliance, Finance, and Risk Adjustment. When these leaders work together, prior authorization can support appropriate care, improve member and provider experience, strengthen program integrity, and ensure responsible stewardship of healthcare resources.

As CMS continues to increase transparency and oversight of utilization management practices, plans should ask an important question:

Does our prior authorization program create measurable value through improved care management, appropriate utilization, operational efficiency, program integrity, and financial performance while supporting timely access to medically necessary care?

Prior authorization strategies can influence more than utilization management outcomes. Decisions regarding which services require prior authorization can affect administrative costs, care delivery, compliance risk, and ultimately the assumptions that support Medicare Advantage bid development and long-term financial performance.

1. Evaluate Whether Prior Authorization Requirements Are Delivering Value

Many plans continue to require prior authorization for services that are approved nearly all the time. While some of these requirements may have historically addressed utilization concerns, they may no longer provide meaningful clinical, quality, compliance, or financial value.

Clinical and Finance leaders should jointly evaluate:

• Approval and denial rates by service

• Administrative burden associated with each requirement

• Impact on medical expense and utilization

• Provider and member experience

• Clinical outcomes associated with the service

The objective should not be to eliminate prior authorization broadly. Rather, it should be to ensure every requirement has a clearly defined purpose and measurable benefit.

In Medicare Advantage, plans should also evaluate whether current PA requirements align with the services and benefit categories reflected in their bid strategy. While plans are not required to identify every individual procedure requiring prior authorization, they are expected to accurately represent service categories subject to utilization management controls. As PA strategies evolve, organizations should ensure operational changes, utilization assumptions, and bid development activities remain aligned.

Key Question: Which prior authorization requirements create administrative burden without demonstrable clinical, quality, compliance, program integrity, or financial value?

2. Use Denials and Appeals to Assess Process Effectiveness

Denials and appeals provide valuable insight into the effectiveness of a prior authorization program. KFF's recent analysis found that a substantial share of denials are ultimately overturned upon appeal, highlighting opportunities to evaluate clinical criteria, reviewer consistency, provider education, and operational workflows.

Clinical leaders should assess:

• Medical necessity criteria

• Consistency of clinical decision-making

• Alignment with evidence-based practice

Finance and Operations leaders should evaluate:

• Appeal-related administrative costs

• Rework caused by overturned determinations

• Resource utilization across the authorization process

A denial that is frequently reversed may indicate an opportunity to improve both the member experience and operational efficiency.

3. Align Prior Authorization with Areas of Highest Clinical and Program Integrity Risk

Prior authorization should focus resources where oversight provides the greatest value.

Plans should regularly assess provider and service-level trends related to:

• High-cost utilization

• Outlier provider patterns

• Coding variation

• Fraud, waste, and abuse (FWA) risk

• Historical audit findings

• Program integrity concerns

External resources can help identify emerging areas of risk, including:

• OIG Work Plan

• Medicare Advantage audit findings

• Medicare Fee-for-Service prior authorization programs

• HHS Program Integrity Reports

• CERT Improper Payment Reports

Many of these reports have historically identified elevated risk in areas such as durable medical equipment (DME), home health services, non-emergent ambulance transportation, post-acute care, and selected outpatient procedural services. These can serve as valuable reference points when evaluating whether current PA requirements are appropriately targeted.

Key Question: Are our prior authorization resources focused on areas with the greatest clinical, compliance, and program integrity risk, or are we managing legacy requirements that no longer provide meaningful oversight?

4. Assess the Impact on Quality, Access, Member Experience, and Risk Adjustment

Prior authorization decisions can influence far more than utilization.

Requirements that create unnecessary delays may affect:

• Medication adherence

• Care coordination

• Preventive care compliance

• Star Ratings performance

• Member satisfaction

• Provider relationships

• Risk adjustment performance and chronic condition recapture efforts

Prior authorization programs can also support broader population health and risk adjustment objectives. Authorization requests frequently generate clinical documentation that may identify opportunities for chronic condition recapture, suspect condition validation, care gap closure, and care management outreach. Organizations that align utilization management, care management, quality, and risk adjustment processes may be better positioned to improve both clinical outcomes and financial performance.

Clinical leaders bring expertise in patient outcomes and quality performance. Finance leaders bring insight into organizational sustainability, incentive revenue, operational investments, and bid performance. Together, they can ensure that utilization management strategies support long-term value rather than creating unintended consequences.

Key Question: How effectively does our prior authorization strategy support member outcomes, risk adjustment accuracy, quality performance, and organizational sustainability?

5. Ensure Governance, Regulatory Readiness, and Financial Alignment

CMS is continuing to expand transparency and reporting expectations related to prior authorization, including reporting requirements, timeliness standards, denial and appeal monitoring, interoperability requirements, and increased scrutiny of utilization management practices. As plans evaluate and modify PA requirements, organizations should ensure those changes are appropriately reflected across governance processes, operational workflows, regulatory reporting, and Medicare Advantage bid development activities.

Strong governance should include:

• Regular review of PA policies

• Clinical policy oversight

• Monitoring of appeals and overturn rates

• Compliance and regulatory readiness

• Health equity considerations

• Oversight of technology-enabled UM processes

• Evaluation of the financial and bid implications of utilization management strategies

The strongest programs demonstrate that prior authorization supports appropriate care while maintaining accountability, transparency, consistency, and financial stewardship.

How Rebellis Group Can Help

At Rebellis Group, we help health plans bring Clinical, Quality, Operations, Compliance, Finance, and Risk Adjustment leaders together to evaluate utilization management programs from a comprehensive enterprise perspective.

Our team supports organizations through:

• Prior Authorization Program Assessments

• PA List Rationalization and Optimization

• Denial and Appeal Trend Analysis

• Clinical Policy and Governance Reviews

• FWA-Focused UM Strategy Development

• Regulatory and Audit Readiness Assessments

• Quality, Star Ratings, Risk Adjustment, and UM Alignment Reviews

• AI and Utilization Management Governance Evaluations

• Strategic Evaluation of PA Impact on Operational Efficiency and Financial Performance

Our approach helps plans determine whether prior authorization requirements are delivering measurable value, supporting member outcomes, strengthening program integrity, and aligning with evolving regulatory and financial expectations. Through our sister company, Toney Healthcare, Rebellis can connect strategic and operational recommendations with experienced physicians who perform prior authorization and medical-necessity reviews as an extension of a plan’s existing clinical team. This flexible model can help plans address reviewer vacancies, specialized cases, seasonal demand and authorization backlogs while maintaining clinical oversight, consistency and required turnaround times.

Final Thought

The most effective prior authorization programs are not defined by the size of their PA list or their denial rates. They are defined by their ability to balance clinical appropriateness, member access, provider experience, quality outcomes, risk adjustment performance, program integrity, and responsible stewardship of healthcare resources.

When Clinical and Finance leaders work together to evaluate prior authorization strategy, health plans are better positioned to reduce unnecessary administrative burden, improve operational performance, strengthen compliance, support risk adjustment and quality outcomes, and ensure utilization management resources are focused where they create the greatest value for members and the organization. These efforts can also contribute to more reliable utilization assumptions, improved financial planning, and stronger Medicare Advantage bid strategies.

The question is no longer whether prior authorization should exist. The question is whether each requirement creates sufficient clinical, operational, regulatory, and financial value to justify the burden it imposes. Organizations that continuously evaluate that balance will be best positioned to serve members, support providers, and achieve sustainable performance.

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