A dermatology practice should automate prior authorization in-house when it wants control, visibility, and predictable cost at steady biologic volume — and treat outsourcing mainly as a stopgap for short-term capacity spikes. Prior authorization automation for dermatology practices works best once biologic PA volume is high and repetitive enough that fixed software cost beats variable per-case fees, while outsourcing still makes sense for a temporary staffing gap or a low-volume niche payer situation.
Why Prior Authorization Hits Dermatology Practices Harder
Dermatology carries a heavier PA load than most specialties because biologics for psoriasis, psoriatic arthritis, and atopic dermatitis almost always require insurer sign-off before the first dose. That's on top of the routine PAs for imaging, Mohs surgery, and certain topical or injectable treatments.
The numbers back this up. Physicians across specialties complete an average of 39 prior authorization requests a week and spend roughly 13 hours of physician and staff time on them, according to the American Medical Association's 2024 Prior Authorization Physician Survey. Two in five physicians in that survey said they employ staff whose sole job is PA. For a derm practice running multiple biologic patients at once, that number climbs fast — each new biologic start, dose change, or re-authorization is another ticket in the queue.
How often does PA actually delay care? A lot. In the same AMA survey, 94% of physicians said PA requirements delay access to care, and close to 80% said PA issues lead patients to abandon a recommended treatment at least some of the time. For a psoriasis patient waiting on a biologic, that delay isn't abstract — it's weeks of flare-ups while paperwork sits in a queue.
Is this improving? Slowly. The 2024 CAQH Index found only about 35% of medical prior authorizations are conducted fully electronically; a large share still runs through phone calls, faxes, and payer portals that require manual data entry. That gap between "electronic" and "automated" is exactly where a dermatology practice has to decide whether to add outside hands or add software.
MGMA's regulatory burden research adds another data point worth sitting with: 92% of medical group practices report they've hired or reassigned staff specifically to handle rising PA volume, and 60% say at least three employees typically touch a single PA request before it's resolved. That's headcount and coordination overhead most derm practices didn't budget for when they added a biologic-heavy patient panel.
Run the math on your own practice: at even a modest 50 PAs a month, that AMA-reported 13 hours a week of physician-and-staff time compounds into hundreds of hours a year — hours that could go toward seeing patients or opening up other service lines. That's the baseline every dermatology practice is working against before it decides whether to add outside labor or add software.
What Outsourcing Prior Authorization Actually Looks Like
Outsourcing means handing PA submissions to a third-party service — a PA outsourcing service or billing-adjacent BPO — that works your queue for a per-case or per-hour fee. You send clinical documentation and payer requirements; they submit, follow up, and (in theory) chase the outcome.
The appeal is straightforward: no hiring, no training, and a team that already knows the mechanics of most major payers. If your practice just added two dermatologists and PA volume spiked before you could hire, outsourcing buys time without a six-month recruiting cycle.
But the trade-offs are real. You're paying variable cost per PA, which means your bill scales directly with volume — exactly when a biologic-heavy quarter should be getting more predictable, not less. You lose day-to-day visibility into where each request sits; if a payer requests more documentation, that request routes through the vendor before it reaches your staff, adding a handoff step and a delay. Data has to leave your system and come back, which raises questions about who's accountable if a request stalls or a denial isn't caught in time.
Here's the part practices often miss: outsourcing doesn't outsource accountability. If a PA gets denied, the appeal, the patient conversation, and the financial exposure land back on your practice regardless of who filed the request. You've offloaded labor, not the denial risk that sits behind it.
What In-House Prior Authorization Automation Actually Looks Like
Automating means deploying software that works inside your EHR and payer portals to gather clinical documentation, populate PA forms, submit requests, and track status — with your staff handling exceptions instead of every single case by hand.
Honey Health's Prior Authorization agent is built for this exact model: it pulls the clinical data a payer needs, submits the request, monitors status across portals and fax, and flags the cases that need a human — a denial, an unusual payer requirement, a peer-to-peer request — while routine PAs move through without staff touching each one. The practice keeps the process in-house; staff get redeployed from data entry to the exceptions that actually need judgment.
Cost-wise, this is a fixed subscription rather than a per-case fee, so as biologic volume grows the marginal cost per PA drops instead of climbing. Visibility stays inside your walls — your staff can see exactly where a request sits at any moment instead of waiting on a vendor update. And because the system lives in your EHR, there's no handoff delay when a payer asks for more information.
The trade-off is real too: automation software has to be configured for your payer mix and specialty, and it doesn't erase the need for staff entirely — someone still has to own the exceptions and appeals. It works best when there's a real volume base to automate against; a two-provider practice with a handful of PAs a month may not see the same return as a growing biologic-heavy practice with real prior authorization automation needs across a larger patient panel.
Outsourcing vs. Automating: A Side-by-Side Comparison
- Cost structure: Outsourcing is variable, per-PA or per-hour — cost rises with volume. Automation is a fixed subscription — cost per PA falls as volume rises.
- Control and visibility: Outsourcing routes work through a third party, so status updates lag. Automation keeps the process and data inside your EHR, visible to staff in real time.
- Turnaround and handoffs: Outsourcing adds a handoff every time a payer needs more documentation. Automation removes that handoff for routine cases since the system already has the data.
- Staff impact: Outsourcing frees staff from PA work entirely (until there's an issue). Automation redeploys staff from repetitive submission work to denials and exceptions.
- Scalability with biologic volume: Outsourcing scales cost linearly with volume — more biologics started, more fees. Automation absorbs volume growth at close to flat marginal cost.
- Denial accountability: Both leave denial risk and appeals with the practice — outsourcing doesn't transfer that liability, it just adds a layer between your staff and the payer.
The Decision Framework: Four Questions to Ask
Which option fits depends less on practice size and more on four specific factors.
How many PAs are you actually processing each month? A single-provider practice with light biologic use might run a handful of PAs a month — not enough volume to justify configuring automation software, and a case where a PA outsourcing service or part-time staff can absorb the load cheaply. A multi-provider practice pushing 100+ PAs a month, especially biologic-heavy ones, hits the point where fixed-cost automation starts winning on math alone.
What's your biologic mix? Practices treating a lot of moderate-to-severe psoriasis, psoriatic arthritis, or atopic dermatitis carry PA volume that's both high and recurring — reauthorizations, dose changes, step-therapy documentation. That repetition is exactly what automation handles well, because the same clinical data gets reused across similar requests.
Do you have staff capacity, or are you already stretched? If your practice already has administrative staff who could be redeployed to handle exceptions rather than routine submissions, automation makes that redeployment possible. If you're short-staffed and can't hire fast enough, outsourcing bridges the gap while you figure out a longer-term fix.
How much control and visibility do you actually need? A practice with a complex payer mix, high-value biologic starts, and low tolerance for delayed care usually wants the request happening inside its own system, where staff can see it and act on it immediately — not sitting in a vendor's queue.
Run a rough number to see why volume matters so much: if a PA outsourcing service charges somewhere in the $15-$25 per-case range and your practice submits 150 PAs a month, that's $2,250-$3,750 a month in variable fees — and it grows every time biologic volume grows. A fixed-cost automation subscription priced below that range, once volume is steady, tends to win on cost alone, before you even count the value of visibility and control.
When Outsourcing Still Makes Sense
Automation wins the volume argument, but outsourcing isn't wrong for every situation. A practice bridging a temporary gap — a new location ramping up, a staff departure, a sudden spike in referrals — can use an outsourced PA service to avoid a backlog while it sets up a longer-term solution. A very low-volume practice with a narrow payer panel might never generate enough PA volume to justify a subscription tool.
The honest read: outsourcing is a bridge, not a destination. It buys time. It doesn't lower your cost per PA as volume grows, and it doesn't give you the visibility to catch a denial early. If your biologic volume is steady or growing — which it usually is once a derm practice builds a real psoriasis or atopic dermatitis panel — the math and the control argument both point toward bringing prior authorization automation in-house.
Frequently Asked Questions
Is prior authorization automation cheaper than outsourcing for a small dermatology practice?
Not always. At low PA volume, a fixed subscription for automation software can cost more per case than paying a PA outsourcing service by the hour or per request. The crossover point depends on your monthly PA count and biologic mix — practices running high volumes of recurring biologic PAs tend to hit that crossover quickly; practices with a handful of PAs a month may not.
Does outsourcing prior authorization reduce denials?
Not on its own. A PA outsourcing service can submit requests correctly and follow up, but the denial decision still comes from the payer based on documentation and medical necessity criteria. The practice still owns the appeal and the patient conversation regardless of who filed the original request.
Can automation handle biologic reauthorizations for psoriasis and psoriatic arthritis?
Yes — reauthorizations are one of the strongest use cases, since they reuse much of the same clinical documentation as the original request. Software that pulls data directly from the EHR can populate a reauthorization with far less manual re-entry than a fresh biologic start.
What happens to staff who used to handle prior authorization manually?
In an automation model, staff typically shift from submitting and tracking every PA by hand to managing the exceptions — denials, peer-to-peer reviews, unusual payer requirements — that actually need judgment. That's a redeployment, not a headcount cut, in most practices that make the switch.
Should a practice try outsourcing before automating?
It depends on the situation. If you're facing a short-term capacity gap — new hires ramping up, a sudden referral spike — outsourcing can absorb volume while you evaluate automation software. If your PA volume is already steady and biologic-heavy, skipping straight to automation usually saves the cost and disruption of switching twice.
