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Ask a practicing physician about prior authorization, and you’ll likely hear a sigh. Many physicians question the necessity of current prior authorization requirements and find the process is overly time-consuming.
In fact, a Sermo poll found that 79% of members believe insurers prioritize profit over patient outcomes. Unlike Medicare and Medicaid, which are government-funded, commercial healthcare relies on private insurers that earn profits by managing healthcare costs and collecting premiums. “The current system forces physicians to navigate organizational priorities that are clearly financial rather than clinical,” one radiologist and OBGYN writes on Sermo.
Similarly, a 2025 survey from the American Medical Association (AMA) found that
- 95% of physicians said prior authorization (PA) delays care,
- Physicians spend an average of 13 hours per week completing PAs
- And 26% reported a serious adverse event caused by a PA delay.
Learn more about the realities of for-profit healthcare and what changes physicians would like to see. Join your peers in the Sermo community to add your voice to the conversation.
The prior authorization crisis: How insurance cost controls delay and deny care
PA was originally developed as a utilization management tool intended to control healthcare spending and reduce inappropriate care. The concept is not inherently controversial. Most physicians will agree that expensive treatments, high-risk procedures, and novel therapies should undergo some level of review to ensure they are being used appropriately.
The debate centers on whether PA has expanded beyond its original purpose. Critics argue that a process designed to prevent unnecessary care is increasingly being applied to routine, evidence-based treatments, creating delays and administrative burdens that may outweigh any cost savings.
Indeed, physicians report that PA has become one of the most significant administrative burdens in medicine and a frequent obstacle to timely treatment. When asked how often PA meaningfully delays or alters care, 59% of Sermo poll respondents said ‘daily’ or ‘frequently’. “It’s hard to see these delays as anything other than a tactic to protect the bottom line, especially when life-saving treatments are denied over technicalities,” states one general practitioner and orthopedic surgeon. “We are forced into a system where ‘medical necessity’ is often defined by a spreadsheet rather than clinical judgment.”
When asked about the time commitment, 67% said their practice spends 10 or more hours per week fighting denials. “Six full-time people are employed by my practice to handle prior authorization,” one interventional cardiologist shares. A family medicine physician said they work with a staff member who receives 10-20 prior authorization requests for prescriptions per day. Healthcare practitioners are feeling the effects of these demands; PA has developed into a “significant driver” of burnout and professional dissatisfaction, according to a 2024 study.
Apart from taking up time, denials could push physicians toward second-best options. Many physicians are concerned that medical necessity denial has become less about quality control and more about cost control. In the Sermo poll, 38% of physicians said insurance denials force them to recommend clinically inferior treatments daily or frequently. And in the 2025 AMA survey, 35% of physicians said they think PA criteria are rarely or never evidence-based.
Ironically, some Sermo members report that denying an inexpensive outpatient test can ultimately cost the insurer more, because the patient deteriorates and requires admission. One review of studies found that current PA requirements are associated with care delays, worsening diseases, preventable hospitalization, longer hospital stays, and lower disease-free survival rates.
“Numerous times a day a patient will end up getting admitted to the hospital for the simple reason that their insurance will not cover the outpatient tests needed,” shares an emergency medicine physician. “So we end up using more resources and actually costing their insurer more by admitting the patient.”
Earlier this year, the U.S. Department of Health and Human Services and the Centers for Medicare & Medicaid Services (CMS) announced a pledge with major health plans to streamline the PA process, but it only led to roughly an 11% reduction in prior authorizations. It also announced that Medicare Advantage, Medicaid & Children’s Health Insurance Program (CHIP), and Marketplace (Federally-facilitated Exchange) plans will be required to use electronic PA processes by January 2027.
However, not all physicians are convinced that these steps will drive sufficient change. In the AMA survey, only 33% of participants said they think the insurer pledge will make a meaningful difference.
How insurance companies may be using AI to automate denials
Insurers are increasingly turning to artificial intelligence to automatically process and reject claims at scale, the AMA reported. 61% of physicians in the organization’s survey said they were concerned that this automation is increasing denials, increasing waste and avoidable patient harm. Only 24% of the respondents believe that PA denials are consistently reviewed by appropriately qualified clinicians. And among physicians who participate in peer-to-peer reviews, only 16% believe the health plan representative on the other end has appropriate qualifications. Many physicians view this as a fundamental mismatch of expertise and responsibility: the reviewer does not carry the ongoing duty of care, yet their decision can directly harm the patient and the treating clinician’s ability to provide timely, guideline‑based care. Additionally, the insurer reviewer who overturns a treating physician’s recommendation may not be trained in the relevant specialty or board‑certified in that field and has never met or examined the patient.
Physicians on Sermo have brought up similar worries. “I am concerned that insurance companies now using AI to deny claims will exacerbate an already problematic and unethical process,” expresses one pediatric psychiatrist.
AI could, in theory, streamline approvals for routine, clearly justified requests, freeing reviewers to focus on genuine edge cases. One 2024 study positioned AI as a way to reduce the burden on physicians, with 65% of private payers reporting that they plan to incorporate AI into their PA process within the next three to five years. On the other hand, if AI is optimized for cost containment rather than clinical accuracy, automation would make denial faster, cheaper and harder to contest. Without meaningful human review and qualified clinical oversight, AI could exacerbate an already strained process.
The incentives behind for-profit insurance decisions
Some Sermo members believe that for-profit insurance isn’t working. “For-profit insurance, where shareholders want those profits, is simply a terrible model for medical care, which is a necessity of life,” a radiologist writes. The outcomes that frustrate physicians result from how the for-profit healthcare model is built.
Medical Loss Ratio and the for-profit healthcare spending cap
The Affordable Care Act (ACA) established a rule that insurers must share the proportion of a premium that was spent on medical services, known as the Medical Loss Ratio (MLR). The ACA requires large group plans to spend at least 85% of premium dollars on medical care. On paper, this protects patients, but insurers could treat the 85% threshold as a ceiling rather than a floor. Every dollar spent on care beyond the minimum is a dollar that doesn’t reach shareholders, creating an incentive to limit utilization to 85%.
“Healthcare isn’t ‘failing.’ It’s functioning exactly as designed to protect margins first and patients second,” writes a nephrology resident on Sermo.
Executive compensation and insurance denial incentives
Compensation structures reinforce the pattern. Insurance executive pay is frequently tied to profitability metrics. When leadership is rewarded for margin, utilization management can become a tool for hitting financial targets.
In the best-case scenario, utilization management can prevent unnecessary or harmful care and promote evidence-based medicine. The risk is that cost-containment tools are applied so broadly that they routinely block care that physicians know to be standard.
When Sermo asked how often physicians had been forced to fight insurers to cover care they believed was clearly the standard of care, 25% said frequently, 39% said occasionally, and 18% said rarely. “Insurance pre auth and denials are significantly worse than they were 5 years ago,” one general surgeon wrote. “Even approved procedures are getting denied for silly reasons.”
The ‘friction’ model
Some believe that for-profit insurance incorporates friction by design. Prior authorization, step therapy, and narrow networks all function as administrative obstacles that reduce utilization. Create too many obstacles, and a percentage of physicians and patients will abandon the process because the time burden is too high. That shifts the burden onto patients, who must pay cash or seek care elsewhere. Small and mid-sized practices often lack the time, staff, or financial resources to contest denials or pursue appeals, so they opt out rather than absorb the cost. Every abandoned request improves the insurer’s margin.
What can physicians do today?
Here are concrete strategies you can use when acting within the healthcare system and working to change it:
Tailor prior authorization appeals
Appeals succeed when they speak the reviewer’s language. Try these tactics:
- Use precise clinical language and cite criteria. Reviewers respond to documentation that maps directly to recognized guidelines. Reference the specific evidence base supporting your recommendation.
- Document medical necessity thoroughly. Spell out why this treatment, for this patient, now. Include relevant history, failed alternatives and guideline citations.
- Escalate to peer-to-peer review and insist on a qualified reviewer. A reviewer in the relevant specialty is a legitimate demand.
- Track denial patterns by payer and procedure. Data can expose systematic behavior. When you can show a payer routinely denies a specific, well-supported procedure, you build a case for both internal efficiency and external advocacy.
Document insurance denials in the patient record
When care is delayed or denied, document it. Record the PA request, the denial, the reviewer’s stated rationale and the clinical impact on the patient. This serves two purposes: it strengthens patient advocacy, and it creates a paper trail that can support legal or regulatory action if the denial causes harm.
Support legislative and regulatory reform
Within your organization and peer groups, you can speak in favor of insurance prior authorization reform, which is building momentum. Here are a few recent developments to highlight in your next discussion:
- The CMS Interoperability and Prior Authorization Final Rule, effective January 1, 2026, requires certain payers to implement electronic prior authorization and to respond within 72 hours for urgent requests and 7 days for standard requests.
- State-level “gold card” laws (in Texas and Vermont, for example) exempt physicians with high approval rates from PA requirements for certain services, rewarding demonstrated clinical reliability.
- The AMA’s “Fix Prior Auth” campaign offers advocacy resources for physicians who want to engage policymakers.
Explore practice models that reduce insurance dependency
Some practice models carry less of a PA burden. Direct primary care, concierge medicine, and cash-pay models reduce or eliminate insurer involvement in clinical decisions. Whether these models expand or reduce access is controversial, but they are a path for physicians seeking to spend less time on prior authorizations.
The bottom line
Polls of the Sermo community and physician sentiment at large indicate that many doctors think the healthcare system is flawed. PA delays care, forces clinically inferior treatment, and drives physician burnout, which could cause adverse events for patients. AI-automated denials threaten to accelerate the problems physicians are already working against.
None of this diminishes the legitimate role that utilization management can play in catching genuine errors. The problem arises when insurers use it primarily to maximize profit, denying claims that have a legitimate clinical rationale.
As physicians continue to share their thoughts on for-profit healthcare, you can add your voice to the discussion. Join the conversation on Sermo to share your own insurance battle stories, learn peer-tested strategies for winning PA appeals and join the growing physician movement demanding reform.
