“Prior authorization” is the process by which health insurers require plan members to obtain their approval before a treatment occurs. It began as a narrow cost-control tool but is now better understood as a “corporate care veto” strategy for boosting Big Medicine insurance conglomerates’ profits. Today, these private insurers impose pervasive prior authorization requirements and then have their own corporate affiliates — including private equity-backed artificial intelligence (AI) companies — adjudicate requests for coverage. This poses a clear conflict of interest because the insurers profit when care is denied. 

Big Medicine insurance conglomerates claim that prior authorization ensures care is “safe, effective, evidence-based[,] and affordable,” while minimizing the risk of surprise bills. In reality, the practice empowers distant corporate entities with a financial conflict of interest to override the professional judgment of physicians with firsthand knowledge of patients’ medical needs. There is generally little to no transparency or accountability for these decisions. Worse still, prior authorization does not actually guarantee coverage, with insurers sometimes denying claims for pre-approved services after the fact — leaving patients and clinicians exposed to unexpected costs. And now, these conglomerates are racing to deploy AI tools that automate prior authorization processes, exacerbating the risk of wrongful delays and denials. 

For patients, prior authorization often results in delayed or denied treatment, worse outcomes, and, in some cases, avoidable hospitalizations or death. For the physicians and other healthcare practitioners who care for them, it imposes a crushing administrative burden that distorts clinical decision-making, undermines the patient-clinician relationship, and contributes to burnout and moral injury.

Physicians and their teams now spend so much time on prior authorization that it consumes the equivalent of 99,487 full-time physicians and advanced practice clinicians — more than the nation’s current physician shortage — at a cost of as much as $32.6 billion annually. In short, prior authorization diverts clinicians from patient care to paperwork, driving some to leave the profession entirely or to shift to concierge practice models accessible only to the wealthy.

There is growing bipartisan recognition that private insurers abuse prior authorization, yet the practice remains rampant and largely unregulated. Both the Biden and Trump administrations adopted some incremental reforms, but those measures fail to address the structural conflict of interest that underpins the corporate care veto strategy. Meanwhile, the public overwhelmingly supports a much more robust solution. A recent poll found that 71% of U.S. voters — including a supermajority of both Democrats (76%) and Republicans (69%) — would support legislation prohibiting private insurers from using prior authorization at all.

This policy brief first traces how prior authorization evolved into today’s pervasive corporate care veto, explains the attendant harms, and describes the shortcomings of recent reform efforts. It then proposes a federal ban on prior authorization, prohibiting Big Medicine conglomerates with a financial conflict of interest from both imposing prior authorization requirements and adjudicating requests for coverage. Under our proposal, the practice of requiring pre-approval before treatment would be allowed only in rare, narrow circumstances where no conflict of interest is present and where strict safeguards are in place, including a prohibition on AI-based denials. By banning prior authorization and ending the corporate care veto, policymakers can start to address our healthcare crisis by improving patient outcomes, restoring clinician autonomy, reducing administrative waste, and freeing up workforce capacity to focus on care delivery.