The Secrets of Prior Authorization (That No One Wants to Talk About) - From former P&T Chairman Jonathan Szkotak

Jonathan Szkotak discusses the secrets of prior authorization

By Jonathan Szkotak

About the Author:

Jonathan Szkotak, PharmD, is a healthcare strategist and managed care consultant with over a decade of experience in formulary development, clinical analytics, and patient access policy. He has chaired multiple Pharmacy & Therapeutics Committees and led data-driven programs to improve drug coverage and healthcare equity. His work blends clinical insight with operational expertise to shape smarter healthcare delivery. Learn more at jonathanszkotak.com or follow him on LinkedIn.

I remember sitting across from a woman in her early 60s. Let’s call her Maria. She had just been prescribed a life-changing medication for her autoimmune disease. Her face lit up when the doctor told her this could slow the disease’s progression.

And then the dreaded words came: “We’ll need to submit a prior authorization.”

Maria didn’t know what that meant. But I did.

It meant a delay. A battle of paperwork. And maybe even a denial.

As someone who’s spent years developing prior authorization policies and leading pharmacy operations for health plans, I’ve seen the inside story—the part patients and even most providers never get to see. So let’s pull back the curtain.

What Is Prior Authorization (Really)?

Officially, prior authorization (PA) is a cost-control process that requires providers to get approval from a health plan before prescribing certain medications or treatments. The goal? Ensure safety, medical necessity, and cost-effectiveness.

Unofficially? It’s often a bureaucratic maze designed to slow spending by creating friction.

PAs are supposed to catch overuse, duplicates, or unproven treatments. But when misused—or overused—they can block timely care. And the criteria? Sometimes arbitrary. Sometimes outdated. And rarely transparent.

Who Writes These Policies?

Here’s the first secret: Most PA criteria aren’t written by your doctor’s team. They’re written by clinicians like me—inside health plans.

We review the data, align with national guidelines, consider FDA labels, and sometimes add extra steps like “must try and fail two other drugs first.” Why? To manage budget impact, steer toward preferred drugs, or comply with contract terms.

Many of these decisions are justified. But some are flat-out about money.

In a review by the Office of Inspector General, 13% of Medicare Advantage denials were for care that should have been approved under Medicare rules (1).

Denials Are Often Strategic

This might sting: Some plans use denials to “manage utilization,” knowing a fraction of patients or providers will appeal. That alone reduces spending.

The ugly truth? If 100 people need a $5,000/month drug, and 30% give up after a denial, the plan just saved $1.8 million a year.

Even when appeals succeed, the delays can lead to worse outcomes. That means increased ER visits, complications, or, in some cases, avoidable hospitalizations.

How Providers Game the System

Doctors and pharmacists aren’t passive victims. Many become experts in PA jujitsu:

• Submitting with the “magic phrases” plans look for.

• Knowing which meds get waved through faster.

• Keeping templates and “go-to” codes for speed.

Is it exhausting? Yes. But it’s the only way to fight back effectively.

I’ve trained teams on this. I’ve also built the very systems others are trying to beat.

Fixing the System Means Owning the Problem

I’ve spent over a decade leading formulary design and authorization policy at health plans. I’ve seen real abuse—and real need. The solution isn’t to scrap prior authorization entirely. It’s to reform it.

We need:

• Transparent criteria. If the rule is “fail two generics first,” say it up front.

• Real-time authorizations. If Amazon can ship same-day, your insulin shouldn't be stuck in limbo for a week.

• Clinical nuance. Not every patient fits a checkbox.

And most of all: Accountability. Patients deserve to know why their care is delayed—and who made that call.

Final Thoughts

Prior authorization is not inherently evil. But it’s been twisted by incentives that reward denial and delay. I’ve worked from both sides of the table. I’ve fought for patients, and I’ve built programs that hold costs in check. These two goals do not have to be enemies.

But they will be, if no one tells the truth.

And the truth is this: until we realign incentives, pr

ior authorization will remain less about care—and more about control.

Want more insights like this? I’m Jonathan Szkotak, and I write about the intersection of healthcare policy, clinical decision-making, and the systems behind the scenes. Read more at www.JonathanSzkotak.com.

References

1. U.S. Department of Health & Human Services, Office of Inspector General. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care. April 2022. https://oig.hhs.gov/oei/reports/OEI-09-18-00260.asp

2. Lo B, Field MJ (eds). Conflict of Interest in Medical Research, Education, and Practice. Washington (DC): National Academies Press (US); 2009. https://www.ncbi.nlm.nih.gov/books/NBK22942/

3. Government Accountability Office. Medicare Advantage: CMS Should Use Data on Disenrollment and Beneficiary Complaints to Strengthen Oversight. GAO-21-76. October 2020. https://www.gao.gov/products/gao-21-76