Manual prior authorization follow-up costs a practice roughly the number of open authorizations, times the weekly status checks per case, times the minutes per check, times your loaded staff cost, plus the harder-to-count cost of delayed care and lapsed approvals. Automating prior authorization follow-up pays back when the staff hours it removes exceed its fees. A worked example below shows how to run that math with your own numbers.
What does manual prior authorization follow-up actually cost?
Most practices can tell you what their prior auth software costs. Few can tell you what the follow-up costs, because it doesn't show up as a line item. It shows up as part of a coordinator's salary, and it's spread across dozens of small interruptions.
The AMA's 2024 prior authorization survey found practices complete an average of 43 prior authorizations per physician per week and spend more than 12 hours on them. Follow-up isn't broken out separately, but anyone who has watched a coordinator work a pending queue knows it's a large share: logging in to portals, searching by member ID, waiting on hold, and typing the result back into the chart.
To size it for your practice, you need four inputs and a little arithmetic.
How do you calculate the cost of follow-up in your practice?
Use this formula:
Monthly follow-up cost = open authorizations per month × status checks per case × minutes per check ÷ 60 × loaded hourly staff cost
Here's what each input means:
- Open authorizations per month. The number of authorizations in flight, not just the number you submit. Cases that take two weeks to resolve are counted in both months.
- Status checks per case. How many times someone looks at a case before it resolves. Three to six is common for slow payers, but count yours.
- Minutes per check. Include the login, the search, any hold time, and entering the result in the EHR. Time a handful of real checks instead of guessing.
- Loaded hourly staff cost. Wages plus benefits, payroll taxes, and overhead. Ask your finance lead for the loaded rate for the role doing the work.
What does a worked example look like?
These numbers are illustrative assumptions, not benchmarks. Replace them with your own.
Suppose a mid-to-large independent practice has 600 authorizations in flight per month. Each case gets an average of four status checks. Each check takes eight minutes, including the login, the search, occasional hold time, and the chart note. Loaded staff cost is $30 per hour.
That works out to 600 × 4 = 2,400 checks a month. At eight minutes each, that's 19,200 minutes, or 320 hours. At $30 an hour, the monthly cost is $9,600, or about $115,000 a year.
Now suppose automation handles 80% of those checks, with staff still working the other 20% as exceptions. The labor saved is about $7,680 a month. If the automation costs less than that, the direct labor math works before you count anything else. If it costs more, you need the indirect benefits below to justify it, or you should negotiate pricing against your real volume.
What are the hidden costs of slow follow-up?
The labor math is the floor. The more expensive costs are the ones that don't show up in payroll.
Delayed care. The AMA survey found 94% of physicians say prior authorization delays necessary patient care. For a practice, delay also means schedule gaps, rescheduled procedures, and patients who go elsewhere.
Lapsed authorizations. An approval that expires before the service happens has to be redone. That's repeat work, and sometimes a repeat delay.
Missed payer deadlines. Under the CMS interoperability and prior authorization final rule, impacted payers must decide urgent requests within 72 hours and standard requests within 7 days beginning in 2026. If nobody is watching the clock, a late decision goes unnoticed and unchallenged.
Burnout and turnover. Follow-up is repetitive, interruptive work. When a coordinator quits, you pay for recruiting, training, and the months of lost institutional knowledge. Few practices count that against the cost of the process, but they should.
Should you hire, build, or automate?
There are three ways to handle growing follow-up volume. Each has a different cost curve.
Hire another coordinator. Simple and familiar. But cost scales linearly with volume, and it adds recruiting and management overhead. It also doesn't fix the underlying problem that follow-up depends on people remembering to look.
Build it in-house. Possible for organizations with engineering resources, but payer portals change, phone and fax channels are messy, and the maintenance never ends. For most practices and MSOs, building prior authorization monitoring isn't the best use of scarce technical staff.
Automate with a vendor. Costs are usually tied to volume, and the work scales without adding headcount. The trade-offs are integration effort up front and the need to manage exceptions.
For most mid-to-large practices, the realistic choice is between hiring and automating. Run the formula above for both, using real volume projections for the next year. If volume is growing, the gap widens.
How should you evaluate the ROI of a follow-up tool?
Ask each vendor to commit to measurable outcomes, and baseline them before you start:
- Hours of staff time spent on status checks per month.
- Average days from submission to decision, by payer.
- Aged authorizations, meaning open cases past your threshold.
- Lapsed or expired approvals.
Then review at 60 and 90 days. If you have the baseline, you can compare actual hours saved to the model and adjust. If you don't, you'll be arguing from impressions.
Honey Health offers a Prior Authorization agent that tracks open requests, checks payer status on a schedule, and routes only exceptions to staff, which is the part of the work that drives the savings in the model above.
Frequently Asked Questions
How much does manual prior authorization follow-up cost?
It depends on volume, the number of status checks per case, minutes per check, and loaded staff cost. In the worked example, 600 in-flight authorizations at four eight-minute checks each and $30 per hour comes to about $9,600 a month. Use your own inputs.
What is the ROI of automating prior authorization follow-up?
ROI comes from the staff hours removed, minus automation fees, plus harder-to-count benefits such as fewer lapsed approvals and less delayed care. Baseline your current hours first so you can show the change.
Does automation actually save staff time?
It can, particularly on repetitive status checks. Savings depend on how many of your payers are covered by portal, phone, and fax automation and how many cases still need human attention.
Will automation let me avoid hiring another coordinator?
Often it lets you absorb growth without a new hire, because the volume work shifts to the agent. Staff then focus on exceptions, denials, and patient communication.
What should I measure to prove the return?
Track staff hours on status checks, days from submission to decision, aged authorizations, and lapsed approvals. Compare each to a baseline from before you started.
