Why Most Prior Authorization Denials Are Preventable?

Prior authorization (PA) is a necessary step in today’s healthcare system, intended to control costs, ensure appropriate care, and reduce unnecessary treatments. However, for providers, it’s also one of the biggest sources of revenue leakage, patient dissatisfaction, and operational inefficiency.

The good news? Most prior authorization denials are completely preventable—but only if your practice understands why they happen and has the right processes in place to address them.

According to the American Medical Association (AMA), 86% of physicians report that prior authorization requirements have a negative impact on patient care, and 33% say it has led to serious adverse events such as hospitalizations. Financially, the stakes are even higher: 25% of healthcare revenue is at risk due to preventable denials, and PA-related issues are a leading contributor.

This article will explore why denials happen, the hidden costs they create, and how working with a dedicated Prior Authorization Services Company like Finnastra can dramatically improve approval rates and cash flow.

The High Cost of Preventable Denials

Denials don’t just delay patient care—they drain resources and erode profitability.

• $262 billion is lost annually in the U.S. healthcare system due to administrative complexity, including preventable denials (CAQH Index).
• Each denied claim costs providers an average of $118 in rework, appeals, and staff overtime (Change Healthcare).
• Practices spend 14 hours per provider per week managing prior authorizations, diverting time from patient care (AMA).

The numbers are staggering. But what’s worse is that 65–75% of these denials are avoidable, meaning that with the right workflow and oversight, the revenue and patient impact could have been entirely prevented.

Top 5 Reasons for Prior Authorization Denials—and How to Fix Them

1. Incomplete or Incorrect Documentation

The problem:
Missing clinical notes, incorrect CPT/ICD-10 codes, or incomplete forms are some of the most common reasons for PA denials.

Example: An orthopedic practice submitted a request for knee surgery without the required conservative therapy documentation. The payer denied the request, delaying the surgery by three weeks and costing the practice $15,000 in lost revenue.

The fix:
As a leading Prior Authorization Services Company, Finnastra ensures every submission is payer-compliant and includes all necessary documentation from the start, reducing denials and back-and-forth communication.

2. Eligibility Verification Errors

The problem:
Submitting a PA before verifying insurance eligibility leads to rejections or misdirected requests.

• According to MGMA, 70% of denials are tied to eligibility issues, such as inactive policies or incorrect plan information.

The fix:
Our Insurance Verification Services integrate seamlessly with prior authorization workflows, ensuring coverage is validated before the PA is even submitted. This eliminates costly delays and rework.

3. Failure to Follow Payer-Specific Guidelines

The problem:
Each payer has its own rules and requirements, which change frequently. Without a centralized system to track updates, practices often submit non-compliant requests.

Example: A specialty clinic had a 25% denial rate for a particular infusion therapy simply because they were using outdated payer criteria.

The fix:
Finnastra maintains real-time databases of payer rules and updates, so every request is compliant from day one. This dramatically improves first-pass approval rates.

4. Manual Processes and Staff Overload

The problem:
Relying on manual phone calls, faxes, and spreadsheets not only slows down PA processing but also increases human error. Staff burnout is inevitable.

• 92% of practices report prior authorization-related burnout, with many seeing high turnover (AMA).

The fix:
When you work with a dedicated Prior Authorization Services Company like Finnastra, you gain access to scalable teams and automation tools that streamline workflows, reduce manual effort, and improve turnaround times.

5. Lack of Tracking and Follow-Up

The problem:
Even when requests are submitted correctly, lack of proactive follow-up can lead to delayed approvals or missed appeal windows.

The fix:
Our Prior Authorization Services are designed to simplify tracking, with transparent reporting and real-time status updates so nothing falls through the cracks.

Real-World Results: The Impact of Getting It Right

A multi-specialty practice in the Midwest partnered with Finnastra after struggling with a 27% PA denial rate. Within 90 days:

• Approval rates increased to 92%, a 40% improvement.
• Denial-related revenue loss dropped by 35%, adding $120,000 in recovered revenue per month.
• Staff reported a 60% reduction in time spent on PA tasks, allowing them to refocus on patient care.

This mirrors broader industry benchmarks, where outsourcing PA services has been shown to improve financial performance while reducing administrative burden.

Why Most Denials Are Preventable

The truth is, denials aren’t inevitable. They’re symptoms of broken workflows, outdated processes, and overextended staff. By fixing the underlying issues—eligibility verification, documentation accuracy, and payer compliance—practices can stop denials before they happen.

As a trusted Prior Authorization Services Company, Finnastra provides:

• End-to-end PA management, from eligibility verification to appeals.
• Payer-specific expertise, ensuring clean, compliant submissions.
• Scalable teams and automation, reducing cost and increasing speed.
• Transparent reporting so executives have real-time visibility into performance.

The Bottom Line for Healthcare Executives

If you’re losing revenue to preventable denials, the impact extends beyond just the balance sheet.

• Patients experience delays in care, damaging satisfaction and trust.
• Staff burnout drives turnover costs and operational instability.
• Payer relationships become strained due to repeated errors and resubmissions.

The solution isn’t more overtime or more staff—it’s smarter, specialized support.

Partner with Finnastra to Eliminate Preventable Denials

When you work with a dedicated Prior Authorization Services Company like Finnastra, you gain a partner focused on protecting your revenue and improving patient outcomes.

Our proven approach delivers:

• Up to 40% improvement in first-pass approval rates
• 35% reduction in denial-related revenue loss
• Measurable decreases in staff workload and burnout

Don’t let preventable denials drain your practice’s resources.

Visit Finnastra Prior Authorization Services today to learn how we can streamline your PA process and secure faster, cleaner approvals.