Electronic prior authorization (ePA) is a technology-driven solution that allows healthcare providers to submit and receive approvals for treatments or prescriptions directly through electronic systems. By replacing manual processes like phone calls and faxes, ePA helps accelerate decision-making, minimize administrative workload, and improve access to timely care for patients.
Key Facts
- Traditional prior authorization (PA) processes cost between $10–25 per request and slowed patient care; the U.S. system was burdened with between $23–31 billion annually in PA processing costs.
- Physician practices save an estimated $1,742 per year per physician by adopting electronic PA, with approval times up to 90% faster than manual processes.
- Real‑world tests of FHIR‑based workflows improved processing speed by 140%+ compared to legacy methods.
Why Replace Manual Workflows?
Manual PA is costly, slow, and unsustainable. Paper forms, faxes, and phone calls not only delay care but also add unnecessary administrative burden for both providers and payers.
According to CAQH, the industry spends over $23 billion annually on manual prior authorization processing, each request costing between $10–$25. These inefficiencies hurt patient care and strain payer-provider relationships.
Electronic prior authorization directly addresses these issues by automating and streamlining the submission, review, and decision process.
What Is ePA and How Does it Work?
Electronic prior authorization (ePA) enables the digital exchange of prior authorization information between providers and payers, often integrated directly within electronic health record (EHR) or pharmacy systems. When implemented effectively, ePA reduces the time required to submit and process requests, from days or weeks to minutes or hours.
Key features of ePA solutions include:
- Faster approvals – Some ePA systems deliver decisions in minutes rather than days.
- Fewer errors – Auto-filled patient and clinical data reduce mistakes from manual entry.
- Improved patient care – Quicker decisions mean reduced delays in starting treatment.
- Lower costs – Practices can save thousands of dollars per physician annually by reducing administrative burden.
The result: faster turnaround times, fewer errors, and more transparency for both providers and patients.
Strategic Value for Payers
Adopting ePA is not just about compliance; it’s about operational transformation.
- Reduced administrative costs – Practices save thousands annually per physician by reducing manual workload.
- Improved provider satisfaction – A smoother PA process improves payer-provider relationships and network engagement.
- Better data visibility – Digital workflows support stronger internal tracking and reporting on KPIs like turnaround time and approval rates.
- Regulatory readiness – Aligns with CMS’s forthcoming requirements for FHIR-based APIs in the prior authorization process (effective 2026).
What Should Payers Consider Before Implementing ePA?
Transitioning to ePA requires thoughtful planning, technical alignment, and internal buy-in. Here are key steps and considerations:
- Assess current workflows
Map out manual processes to identify redundancies, bottlenecks, and inefficiencies. This helps determine where ePA will drive the most value. - Choose the right technology partners
Work with vendors that offer robust ePA solutions with proven interoperability. Ensure systems support both real-time pharmacy benefit (RTPB) and medical benefit authorization. - Integrate with FHIR-based APIs
While FHIR is covered more extensively in a separate readiness priority, it’s import to select or build ePA solutions that align with this standard to future-proof your operations. - Engage providers early
Provider adoption is crucial. Offer onboarding support, training, and clear documentation to encourage usage and reduce friction. - Establish strong governance
Cross-functional teams (e.g., IT, compliance, utilization management, and analytics) should oversee implementation and monitor performance. - Track and report performance metrics
Monitor key indicators like average approval time, rate of manual intervention, and provider satisfaction. Use these insights to continuously optimize the system.
Helpful Resources
To support your organization’s transition from manual to electronic PA, consider these tools and frameworks:
- CAQH Index Reports – Benchmarking data on electronic administrative transactions
- HL7 Da Vinci Project – Use cases and implementation guides for FHIR-based PA workflows
- CMS Final Rule Summary (2024) – Outlines federal requirements for payer interoperability and prior authorization standards
- NCPDP ePA Standard – Technical standards for ePA in pharmacy benefit management
Final Word
Replacing manual workflows with electronic prior authorization is one of the most impactful steps payers can take to modernize operations and prepare for a more interoperable future. It supports regulatory compliance, improves provider relations, and unlocks operational efficiencies that benefit every stakeholder, especially the patient.
If your organization is exploring how to build or enhance ePA capabilities, our team can help you design scalable workflows, select the right technology partners, and create internal alignment for success.
Key Takeaways
- ePA is a critical first step for payers looking to replace manual prior authorization workflows and prepare for regulatory and operational transformation.
- Implementing ePA drives efficiency by reducing administrative burden, accelerating approval times, and improving payer-provider collaboration.
Successful adoption requires planning — including governance, provider engagement, FHIR-ready technology, and performance tracking to ensure long-term value.
FAQs
What are the most important first steps for payers beginning to implement ePA?
Start by assessing your current manual workflows to identify inefficiencies, then engage internal stakeholders and select a technology partner that supports integration with EHR systems and FHIR-based APIs. Governance planning and provider outreach are also key to ensuring adoption and sustainability.How does ePA impact provider relationships?
ePA improves provider satisfaction by reducing wait times, minimizing redundant paperwork, and providing greater transparency into authorization requirements and statuses. This streamlines communication and helps foster stronger, more collaborative payer-provider partnerships.Is ePA required by CMS or other regulators?
While ePA itself is not universally mandated today, CMS’s 2026 interoperability rule requires payers to implement FHIR-based APIs to support prior authorization workflows. Investing in ePA now helps organizations align with these upcoming requirements and remain ahead of compliance deadlines.
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Sources
- Council for Affordable Quality Healthcare (CAQH)
2022 CAQH Index Report
https://www.caqh.org/hubfs/43908627/drupal/2022-caqh-index-report%20FINAL%20SPREAD%20VERSION.pdf - Portiva
Electronic Prior Authorization: Streamlining Access to Medications
https://portiva.com/electronic-prior-authorization/ - America’s Health Insurance Plans
Health Plans Take Action to Simplify Prior Authorization
https://www.ahip.org/news/press-releases/health-plans-take-action-to-simplify-prior-authorization - Centers for Medicare & Medicaid Services (CMS)
Prior Authorization API
https://www.cms.gov/priorities/burden-reduction/overview/interoperability/frequently-asked-questions/prior-authorization-api - American Health Information Management Association (AHIMA)
Considerations for a Transition to Electronic Prior Authorization
https://www.ahima.org/media/rdaamo3c/epa-issue-brief_v4.pdf
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