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Prior authorization is a check run by some insurance companies or third party payers before they will agree to cover certain prescribed medications or medical procedures. There are a number of reasons that insurance providers require prior authorization, including age, medical necessity, the availability of a generic alternative, or checking for drug interactions. A failed authorization can result in a requested service being denied, or an insurance company requiring the patient to go through a separate process known as "step therapy" or "fail first".
More recently, a study of 12 primary care practices published earlier this year in the Journal of the American Board of Family Medicine put the mean annual projected cost per full-time equivalent physician for prior authorization activities between $2,161 and $3,430. The study’s authors concluded that “preauthorization is a measurable burden on physician and staff time.” source: Medical Economics
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