Prior authorization automation is typically priced per authorization, per provider on a subscription, or as a flat platform fee, and most vendors quote it after a demo rather than publishing rates. ROI comes from four places: staff hours saved, faster approvals, fewer avoidable denials, and fewer delayed procedures. A mid-to-large independent practice should model all four against the full cost, including implementation and training.
What pricing models do prior authorization automation vendors use?
Three models cover most of the market, and each shifts risk differently.
Per-authorization pricing. You pay a fee for each request the tool handles. Cost tracks volume, which is easy to forecast if your volume is steady and painful if it spikes. It aligns the vendor's revenue with your usage.
Per-provider or per-location subscription. You pay a flat monthly amount for each clinician or site. Budgeting is simple, and heavy users get a better deal, but low-volume providers can end up subsidizing the rest.
Platform or enterprise fee. A negotiated annual contract, often bundled with other workflows such as fax handling, referrals, or benefits verification. This is common for multi-site groups and tends to include implementation support.
Most vendors don't publish prices, so ask for a written quote based on your actual volume. Be skeptical of any comparison that cites a vendor's price without saying what it includes.
What costs should you include besides the software fee?
The license is rarely the whole bill. Build the total cost from these components:
- Software fees under whichever model the vendor uses.
- Implementation and integration, including any work to connect to your EHR. DrChrono's own prescription ePA runs through its CoverMyMeds integration, but medical-benefit tools connect differently, so ask how and who pays.
- Training and change management for the staff who will manage exceptions.
- Oversight time. Someone should review exception queues and spot-check outcomes weekly, especially in the first quarter.
- Contract terms, such as minimums, annual escalators, and what happens if you want out.
How do you calculate ROI on prior authorization automation?
Start with the baseline. The AMA's 2024 physician survey found practices handle about 39 authorization requests per physician each week, taking roughly 13 hours of physician and staff time, and that 40% of physicians have staff who work exclusively on authorizations. For a group with many physicians, multiply that out and the staff-hour figure becomes significant.
Then use this structure:
- Hours saved. Authorizations per month × minutes saved each ÷ 60.
- Dollar value of hours. Hours saved × loaded hourly cost (wages, benefits, overhead).
- Revenue protected. Procedures that would have been delayed or lost × net revenue per procedure.
- Denial cost avoided. Avoidable denials prevented × rework cost per denial.
- Net ROI. Total benefit minus total annual cost, divided by total annual cost.
Here's an illustrative example using assumed numbers, not benchmarks. A multi-physician group handles 1,500 authorizations a month and automation saves 15 minutes on each, which is 375 hours. At a $30 loaded hourly cost, that's $11,250 a month. If the tool and its oversight cost $8,000 a month all in, the labor savings alone net about $3,250 monthly, before counting any protected revenue. Add even a few procedures that no longer slip, and the case strengthens. Cut the minutes saved in half and the labor-only case disappears, so test your assumptions before committing.
For the per-request reference point, the 2019 CAQH Index estimated manual authorizations at roughly $11 each versus about $2 fully electronic. The figures are dated, but they show why electronic and automated handling is cheaper per request.
What are the hidden costs of staying manual?
Manual processes carry costs that don't appear in a software quote. Staff spend time on hold and re-entering data. Procedures slip when approvals arrive late, which affects schedules and revenue. Denials that stem from missing documentation create rework and appeals. And repetitive, high-stress work contributes to turnover, which means recruiting and training costs on top of lost expertise.
None of these has a clean number you can cite, but your practice administrator can estimate each one from your own records: overtime on authorization work, average days from order to approval, denial reasons by category, and authorization-team turnover over the past two years.
How should you pilot it to confirm the ROI?
Don't sign a multi-year contract on projections. Run a 60 to 90 day pilot on a defined slice, such as one specialty line or one set of payers. Track four numbers before and after: minutes per authorization, turnaround time from order to decision, first-pass approval rate, and exception volume.
Honey Health's prior authorization agent is an example of the AI agent approach that works alongside your EHR; whichever tool you evaluate, require that it report those same four numbers. If the pilot confirms the savings, scale up. If it doesn't, you'll know before the larger commitment.
Frequently Asked Questions
How much does prior authorization automation cost?
Pricing varies by vendor, volume, and model. Common structures are per-authorization fees, per-provider subscriptions, and flat platform fees, usually quoted after a demo. Ask for the all-in cost, including implementation and training, rather than just the license fee.
What is a good ROI for prior authorization automation?
There's no universal benchmark, since it depends on your volume, staff cost, and denial rate. A reasonable test is whether labor savings alone cover the all-in cost during a pilot, with protected revenue as upside.
How many hours does prior authorization take?
The AMA's 2024 survey found about 39 requests per physician per week and roughly 13 hours of physician and staff time. Your own numbers will differ, so measure minutes per request for a few weeks before building a business case.
Is it cheaper to hire someone to handle prior authorizations?
Hiring is predictable but scales with volume, and it adds turnover risk. Automation scales at a lower marginal cost but requires oversight. Many practices combine the two, using software for routine volume and a coordinator for exceptions.
Does DrChrono include prior authorization at no extra cost?
DrChrono offers prescription ePA through its CoverMyMeds integration. Pricing and plan details vary, so confirm what's included in your DrChrono plan directly. Medical-benefit authorizations generally require a separate tool.
