The Hidden Cost of Prior Authorization: What the AMA's 2024 Data Really Shows
The Hidden Cost of Prior Authorization: What the AMA's 2024 Data Really Shows
Audience: Physicians, PA coordinators, practice administrators
Published: 2026-04-01
Category: Practice Management
The Hidden Cost of Prior Authorization: What the AMA's 2024 Data Really Shows
6 minute read
The number that circulates most often in conversations about prior authorization is 34 hours per week. That is the average time physicians and their staff spend on prior authorization tasks, according to the American Medical Association's 2023 Prior Authorization Physician Survey.¹ It is a striking figure, and it is frequently cited in press releases and policy arguments.
What it rarely gets is context. What does 34 hours per week actually cost? Who is spending those hours, on what, and what is it preventing them from doing instead? This piece breaks down what the AMA data shows in its entirety, calculates what that burden costs a typical practice in concrete dollars, and reviews what the evidence says actually reduces it.
What the AMA Survey Actually Found
The 2023 AMA survey is the most comprehensive recent study on prior authorization burden in U.S. physician practices. Its findings go well beyond the 34-hour figure.
Volume: Physicians complete an average of 43 prior authorization requests per physician per week. Broken down by specialty, the burden is highest in rheumatology, dermatology, oncology, and neurology, where complex biologics and specialty medications require PA for the majority of patients on high-cost drugs.¹
Approval rates: Over 80 percent of prior authorization requests are ultimately approved. This means the majority of physician time spent navigating prior authorization goes toward securing authorizations that payers grant, not toward preventing genuinely inappropriate care.¹
Burden perception: 88 percent of physicians report that the overall PA burden is high or extremely high. 94 percent say PA delays patient access to necessary care. These are not marginal complaints.¹
Adverse outcomes: 34 percent of physicians report that a prior authorization delay has led to a serious adverse event for a patient. This includes hospitalizations, care abandonment, and disease progression during the authorization window.¹
Prescribing avoidance: A documented phenomenon in the research literature, prescribing avoidance occurs when a physician prescribes a second-choice medication to avoid the PA burden associated with the first-choice drug. The AMA data shows 28 percent of physicians have done this, and it has direct implications for patient outcomes.²
The Real Dollar Cost of 34 Hours Per Week
The 34-hour figure represents the average across practices of all sizes. To convert that into a dollar figure, you need to make assumptions about who is doing the work and at what cost.
In a practice that handles PA primarily through a dedicated coordinator:
A prior authorization coordinator's median salary is approximately $45,000 to $55,000 per year, or roughly $22 to $27 per hour including benefits.³ If that coordinator spends 30 of the 34 weekly PA hours on their own work, the direct labor cost is approximately $33,000 to $42,000 per year in coordinator compensation alone.
In a practice where physicians and clinical staff also participate:
The calculation becomes significantly more expensive. When a physician handles peer-to-peer calls, reviews denials, or drafts appeal letters, the opportunity cost is substantial. A physician spending four hours per week on PA-related tasks at a typical RVU-based compensation rate of $150-$250 per hour in lost productivity represents $31,200 to $52,000 per year in opportunity cost.⁴
Combined direct and indirect cost estimate for a single physician practice:
Conservative estimate: $65,000 to $90,000 per year in combined coordinator labor, physician time, and administrative overhead directly attributable to prior authorization.
For a four-physician group, that scales to $260,000 to $360,000 annually. These are not costs that appear as a line item in the practice budget. They are embedded in staffing ratios, overtime, physician dissatisfaction, and patient access delays.
What Drives the Cost Higher Than It Needs to Be
Prior authorization was not designed to generate 34 hours per week of administrative labor. The expansion of PA requirements over the past decade, and the payer-specific variation in how those requirements are structured and documented, is responsible for a significant portion of the current burden.
Payer-specific criteria: Each insurer maintains its own coverage criteria for each drug. What Aetna requires for a biologic approval differs from what Cigna requires. PA coordinators working across multiple payers must maintain familiarity with criteria that are updated without notice, submitted through different portals, and evaluated by reviewers with varying levels of clinical training.
Non-standardized forms: Despite years of effort to standardize electronic prior authorization through the AMA's Electronic Prior Authorization initiative and CMS requirements under the Improving Seniors' Timely Access to Care Act of 2022, a significant proportion of PA submissions still occur via fax or payer-specific web portals with non-standardized fields.⁵
Re-authorization requirements: The AMA survey found that 84 percent of physicians report that PA requirements for the same drug, at the same dose, for the same patient, force them through the same documentation process multiple times per year. Re-authorization for chronic conditions represents a substantial portion of the 34 weekly hours.¹
Peer-to-peer calls: Peer-to-peer reviews are among the most time-intensive components of the PA process because they require physician availability during business hours, interrupting clinical schedules. Yet they remain a primary escalation mechanism when initial requests are denied.
What the Evidence Says Reduces the Burden
Several interventions have documented evidence for reducing the per-PA time investment without reducing approval rates.
Payer-specific documentation at initial submission. Denials that result from insufficient documentation generate the most expensive iterations: the initial submission, the denial, the appeal, the peer-to-peer. Practices that submit initial LMNs incorporating payer-specific criteria have meaningfully lower denial rates on first submission, reducing the downstream burden substantially.
Gold carding. Gold carding is a designation offered by some payers that exempts physicians with high PA approval rates from prior authorization requirements for specific drugs or drug classes. As of 2025, more than a dozen states have gold carding laws that require insurers to offer this exemption.⁶ Physicians who qualify and actively pursue gold carding status with their high-volume payers can eliminate a significant portion of their weekly PA burden entirely.
Protocol-based re-authorization. For chronic conditions requiring repeat authorization, the AMA and several specialty societies have advocated for multi-year authorizations and automatic renewal protocols for patients who are stable on therapy. Some payers have adopted these protocols. Identifying which payers offer this and requesting it for appropriate patients can reduce the re-authorization component of weekly PA work.
Structured appeal workflows. The data consistently shows that appeal letters citing the specific reason for denial, with the appropriate clinical evidence, have substantially higher approval rates than generic letters. Standardizing the appeal workflow around this principle reduces the time spent on appeals that do not succeed.
What Practices Can Do Now
The systemic issues with prior authorization require legislative and regulatory solutions that are beyond any single practice's control. The Improving Seniors' Timely Access to Care Act of 2022 introduced electronic PA requirements for Medicare Advantage, and prior authorization reform legislation has been proposed at the federal and state level, though comprehensive reform has not yet passed.⁵
At the practice level, the most immediately controllable variable is the quality of the documentation submitted at the time of the initial PA request. Letters that address payer-specific criteria, incorporate the correct clinical evidence, and preemptively answer the questions insurers most commonly ask generate fewer denials, fewer appeals, and fewer peer-to-peer calls.
Tools that give PA coordinators access to payer-specific criteria before they draft the initial letter, and that help them build letters targeting those criteria directly, are among the highest-leverage interventions available without waiting for legislative change.
Ellen is one such tool. It is free for practices to start and does not require EHR integration. Get started at ellenrx.com/providers.
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