{
  "slug": "prior-auth-labor-cost",
  "title": "Prior Authorization Labor Cost Calculator",
  "heading": "Prior Authorization Labor Cost Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/prior-auth-labor-cost",
  "summary": "Quantify staff time and cost consumed by prior authorization requests.",
  "description": "Prior authorization is one of the most time-consuming administrative burdens in medical practice, with AMA surveys reporting practices average roughly two full business days of physician and staff time per week on PA requests. This calculator multiplies your monthly PA volume by average minutes per request and loaded staff hourly cost to show the true labor cost of prior auth, then adds the opportunity cost of delayed or denied care that leads to rework or patient abandonment. It also estimates how much an electronic prior auth (ePA) tool could save if it cuts average handling time, which is the main lever available since PA volume itself is largely outside a practice's control.",
  "formula": "Monthly labor cost = PA requests × avg minutes per request ÷ 60 × loaded hourly rate; savings from ePA = requests × (current minutes − ePA minutes) ÷ 60 × hourly rate.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=prior-auth-labor-cost",
  "inputs": [
    {
      "id": "paRequests",
      "label": "Prior auth requests per month",
      "kind": "number",
      "hint": null,
      "default": 180,
      "unit": null,
      "min": 0,
      "max": null
    },
    {
      "id": "minutesPerRequest",
      "label": "Avg minutes per request (current process)",
      "kind": "number",
      "hint": null,
      "default": 25,
      "unit": null,
      "min": 1,
      "max": null
    },
    {
      "id": "staffHourly",
      "label": "Loaded staff hourly cost",
      "kind": "number",
      "hint": null,
      "default": 26,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "denialFollowupRate",
      "label": "% of PAs requiring appeal/follow-up",
      "kind": "number",
      "hint": null,
      "default": 20,
      "unit": "%",
      "min": 0,
      "max": 100
    },
    {
      "id": "followupMinutes",
      "label": "Additional minutes per follow-up",
      "kind": "number",
      "hint": null,
      "default": 20,
      "unit": null,
      "min": 0,
      "max": null
    },
    {
      "id": "epaMinutes",
      "label": "Avg minutes per request with ePA tool",
      "kind": "number",
      "hint": null,
      "default": 10,
      "unit": null,
      "min": 0,
      "max": null
    },
    {
      "id": "epaCost",
      "label": "Monthly cost of ePA tool",
      "kind": "number",
      "hint": null,
      "default": 400,
      "unit": "$",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "annualCost",
      "label": "Annual prior auth labor cost",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "monthlyCost",
      "label": "Monthly prior auth labor cost",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "epaLaborCost",
      "label": "Monthly cost with ePA tool",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "savings",
      "label": "Monthly savings from ePA tool",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "annualSavings",
      "label": "Annual savings from ePA tool",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Prior auth requests per month: 180",
      "Avg minutes per request (current process): 25",
      "Loaded staff hourly cost: 26 $",
      "% of PAs requiring appeal/follow-up: 20 %",
      "Additional minutes per follow-up: 20",
      "Avg minutes per request with ePA tool: 10",
      "Monthly cost of ePA tool: 400 $"
    ],
    "outputs": [
      "Annual prior auth labor cost: $27,144",
      "Monthly prior auth labor cost: $2,262",
      "Monthly cost with ePA tool: $1,336",
      "Monthly savings from ePA tool: $926",
      "Annual savings from ePA tool: $11,112"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter prior auth requests per month.",
      "Enter avg minutes per request (current process).",
      "Enter loaded staff hourly cost ($).",
      "Enter % of pas requiring appeal/follow-up (%).",
      "Enter additional minutes per follow-up.",
      "Enter avg minutes per request with epa tool.",
      "Enter monthly cost of epa tool ($).",
      "Read your annual prior auth labor cost on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "paRequests": 110,
        "minutesPerRequest": 15,
        "staffHourly": 16,
        "denialFollowupRate": 10,
        "followupMinutes": 10,
        "epaMinutes": 6,
        "epaCost": 250
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "paRequests": 180,
        "minutesPerRequest": 25,
        "staffHourly": 26,
        "denialFollowupRate": 20,
        "followupMinutes": 20,
        "epaMinutes": 10,
        "epaCost": 400
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "paRequests": 290,
        "minutesPerRequest": 40,
        "staffHourly": 42,
        "denialFollowupRate": 30,
        "followupMinutes": 30,
        "epaMinutes": 16,
        "epaCost": 650
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "How much time does prior auth really take nationally?",
      "a": "The 2023 AMA Prior Authorization survey found physicians and staff spend an average of about 13 hours per physician per week across all PA requests, and roughly a third of physicians report having staff dedicated exclusively to prior authorization work."
    },
    {
      "q": "Does electronic prior authorization (ePA) actually save time?",
      "a": "Yes, meaningfully — surveys of practices adopting ePA integrated into the EHR report handling time cutting by half or more per request compared to phone and fax-based processes, mainly by pre-populating clinical data and routing electronically instead of waiting on hold."
    },
    {
      "q": "Which services trigger the most prior auth burden?",
      "a": "Advanced imaging (MRI, CT), specialty medications, and certain surgical procedures generate the highest PA volume and denial rates. If a specific payer or service line dominates your PA queue, targeting that relationship or drug class for ePA or peer-to-peer review first gives the fastest payback."
    },
    {
      "q": "Should physicians do peer-to-peer reviews themselves or delegate?",
      "a": "Physicians should reserve peer-to-peer calls for genuinely complex denials since only a licensed provider can do them, but trained staff should handle the initial submission, documentation gathering, and routine follow-up to keep physician time focused on clinical work."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/claim-denial-rate-cost",
    "https://www.revenuelab.fyi/toolbox/nurse-staffing-ratio-cost"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Prior Authorization Labor Cost Calculator (https://www.revenuelab.fyi/toolbox/prior-auth-labor-cost)"
}