The Impact of Precertification on a Large Multispecialty Physician Group: An Illustrative Case Study

Date of Award

Spring 2021

Document Type


Degree Name

Doctor of Healthcare Administration (DHA)

Committee Chair

David Meckstroth

Committee Member

Alyncia Bowen

Committee Member

Gail Frankle


In the United States, 34.2% of healthcare costs result from administrative spending (Himmelstein, Campbell, & Woolhandler, 2020). The costliest and most time-consuming of these administrative processes is precertification. Precertification is a health insurer requirement that providers obtain permission before providing planned medical procedures in order to be eligible for payment. The Council for Affordable Quality Healthcare (CAQH) tracks adoption of the Health Insurance Portability and Accountability (HIPAA) mandated transactions to measure the progress in reducing cost and burden associated with administrative processes. CAQH estimated that the healthcare industry spent $767 million in 2020 on obtaining precertification. The requirement to obtain precertification can affect the processes and workflows across an organization, including scheduling, access, patient care, information systems, coding, and billing.

This illustrative case study examined the precertification process for a large multispecialty physician group to determine its challenges and impacts. The study gathered information through a review of claims denied for missing precertification and individual in-depth semi-structured interviews with leaders responsible for aspects of the precertification process. The research focused on identifying the necessary steps in the precertification and denial resolution process and the challenges posed by this administrative requirement. The research identified several challenges in the precertification process, most of which can be linked to one of three broad categories; lack of standardization, time required to obtain approval, and lack of recognition of provider specialty and place of service considerations. Recommendations for improving this process include proposals for the industry, insurance companies, and the physician organization.