Healthcare Data GlossaryPayer
Prior Authorization: Definition and Healthcare Context
Full name: Prior Authorization (Precertification)
Prior authorization is a requirement by a health insurer that a provider obtain approval before delivering certain services, procedures, or medications for them to qualify for reimbursement. Used to manage utilization and cost, prior authorization has been associated with treatment delays and administrative burden. The CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F) requires payers to implement FHIR-based APIs for electronic prior authorization beginning in 2027 for Medicare Advantage, Medicaid, and CHIP plans.
Last updated: 2026-06-17Reviewed by: Dr. Jennifer Montecillo, MD — Gullas College of Medicine, 2019. Non-practicing medical reviewer.
How it’s used
- CMS NPPES NPI Registry: provider NPI is required in prior authorization requests to identify the ordering or treating provider.
Frequently asked questions
- What is prior authorization?
- Prior authorization (or precertification) is an insurer's requirement for advance approval of specific services, procedures, or medications before they are covered for payment.
- What is the CMS rule on prior authorization?
- CMS-0057-F requires Medicare Advantage, Medicaid, and CHIP plans to implement FHIR-based electronic prior authorization APIs starting in 2027.
- Why is prior authorization controversial?
- Critics argue prior authorization delays medically necessary care and imposes significant administrative burden on clinicians and patients.