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System Design: Prior Authorization Workflow

Domain: HealthTech · Pattern: Evidence Aggregation + Policy RAG + Submission Readiness + HITL

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Interview Problem Statement

"A national health insurer wants to reduce prior authorization processing time from an average of 3–5 business days to under 4 hours for its provider network of 50,000 physicians. Design an agentic system to support the end-to-end prior authorization workflow. Please draw the architecture."

Why this wording works as an interview question

Design choice Rationale
"National health insurer" Stakes are clear; HIPAA/PHI compliance is implied but not stated
"50,000 physicians" Forces scale thinking without prescribing exact request volume
"3–5 days → under 4 hours" Gives a concrete goal while leaving implementation fully open
"Support the workflow" Intentionally vague — candidate must ask: support whom? Providers? Reviewers? Both?
No mention of evidence type Forces clarifying question on EHR, imaging, notes
No mention of legacy systems Forces clarifying question on Epic, fax, payer portals

Clarifying Questions

Prior authorization is a multi-stakeholder workflow. These questions must be answered before committing to a design:

Question Why It Matters
Who submits the PA request — provider staff, EHR auto-trigger, or both? Determines the intake surface and whether the system needs an EHR integration vs. a standalone portal
What clinical evidence is available digitally? (EHR notes, lab results, imaging reports, medication history) Defines what the Evidence Aggregator must fetch and in what formats (FHIR, PDF, HL7)
Are payer policy documents structured (JSON criteria sets) or unstructured (PDF clinical guidelines)? Structured criteria → rules engine; unstructured → RAG over PDFs; most real deployments need both
Which EHR platforms must the system integrate with? (Epic, Cerner, etc.) Is fax still in use? Defines the Legacy System Connector's complexity; fax is still dominant in US healthcare
Are there urgency tiers — standard, expedited, concurrent/urgent? Same pipeline but priority queue routing; urgent PAs need a near-real-time path
What is the scope? (medications, procedures, imaging, DME, or all authorization types?) Each type has different policy criteria structures and evidence requirements

System Architecture Overview

┌──────────────────────────────────────────────────────────────────────────────────┐
│                         SUBMISSION SURFACE                                        │
│                                                                                   │
│   ┌──────────────────┐   ┌──────────────────┐   ┌───────────────────────────┐   │
│   │  Provider Portal  │   │  EHR Auto-Trigger │   │  Fax / Legacy Payer       │   │
│   │  (web / mobile)   │   │  (Epic / Cerner   │   │  Portal Ingestion         │   │
│   │  Staff-submitted  │   │   FHIR R4 event)  │   │  (OCR + eFax gateway)    │   │
│   └────────┬──────────┘   └────────┬──────────┘   └──────────────┬────────────┘  │
└────────────┼──────────────────────┼─────────────────────────────┼───────────────┘
             └──────────────────────┴──────────────┬──────────────┘
                                                   │  PA request + metadata
                                                   ▼
┌──────────────────────────────────────────────────────────────────────────────────┐
│                    SECURITY & COMPLIANCE LAYER                                    │
│                                                                                   │
│   • PHI De-identification: strip / tokenize patient identifiers before           │
│     passing clinical text to any cloud LLM                                       │
│   • Prompt Injection Guard: sanitise all free-text clinical note fields          │
│   • BAA Verification: confirm model provider has signed Business Associate       │
│     Agreement; route to on-prem model if not                                     │
│   • Audit Log Init: create immutable audit record (required for HIPAA)           │
└──────────────────────────────┬───────────────────────────────────────────────────┘
                               │  Sanitised PA package + urgency flag
                               ▼
┌──────────────────────────────────────────────────────────────────────────────────┐
│                       ORCHESTRATOR AGENT                                          │
│                                                                                   │
│   Model: Multi-modal Foundation Model (Claude / Gemini)                          │
│   Pattern: Plan → Dispatch → Reflect → Route                                     │
│                                                                                   │
│   • Routes to URGENT (4hr) or STANDARD (24hr) queue                             │
│   • Dispatches Evidence Aggregator + Policy Interpreter in parallel              │
│   • Detects conflicts between evidence and policy findings                       │
│   • Applies escalation rules before routing to reviewer                          │
└──────┬──────────────────────────┬──────────────────────────────────┬─────────────┘
       │                          │                                  │
       ▼                          ▼                                  ▼
┌─────────────────┐   ┌───────────────────────┐         ┌───────────────────────┐
│    EVIDENCE     │   │     POLICY            │         │  LEGACY SYSTEM        │
│   AGGREGATOR    │   │    INTERPRETER        │         │   CONNECTOR           │
│                 │   │                       │         │                       │
│ • FHIR R4 API  │   │ • RAG over payer      │         │ • EHR read (Epic)     │
│   (labs, meds, │   │   policy PDF library  │         │ • Submit to payer     │
│   diagnoses)   │   │ • Structured criteria │         │   portal / eFax       │
│ • OCR scanned  │   │   checklist output    │         │ • Prior PA history    │
│   docs         │   │ • Policy versioning   │         │ • CMS status updates  │
└────────┬────────┘   └──────────┬────────────┘         └───────────┬───────────┘
         └───────────────────────┴──────────────────────────────────┘
                                 │  Evidence bundle + Policy criteria + Prior PA history
                                 ▼
┌──────────────────────────────────────────────────────────────────────────────────┐
│                    SUBMISSION READINESS AGENT                                     │
│                                                                                   │
│   CRITERIA CHECK          │  STATUS     │  ACTION                                │
│   Diagnosis codes present │  ✅ Found   │  —                                     │
│   Clinical notes ≥ 90 days│  ✅ Found   │  —                                     │
│   Lab result: HbA1c       │  ❌ Missing │  Request from provider                 │
│   Prior treatment failed  │  ⚠️ Partial │  Needs clarification                   │
│   Step therapy documented │  ✅ Found   │  —                                     │
│                                                                                   │
│   Output: COMPLETE (proceed) or INCOMPLETE (notify provider of gaps)            │
└──────────────────────────────┬───────────────────────────────────────────────────┘
                               │
             ┌─────────────────┴──────────────────┐
             │                                     │
             ▼                                     ▼
     INCOMPLETE                               COMPLETE
  Notify provider ◄── provider responds          │
  of specific gaps ──────────────────► re-run    ▼
                                        DECISION SUPPORT AGENT
                                        Evidence → Criteria Mapping
                                        Confidence Score + Recommendation
                                               │
                                               ▼
┌──────────────────────────────────────────────────────────────────────────────────┐
│               HUMAN-IN-THE-LOOP — CLINICAL REVIEWER QUEUE                        │
│                                                                                   │
│   AI is decision SUPPORT. Final approve / deny rests with a licensed reviewer.  │
│                                                                                   │
│   RECOMMENDATION  │  CONFIDENCE  │  CONDITIONS                                   │
│   ✅ Approve       │  HIGH (92%)  │  All criteria met, no conflicts               │
│   ⚠️ Approve w/   │  MEDIUM      │  Minor gap or borderline criterion            │
│      conditions   │  (68–85%)    │  — reviewer must confirm                      │
│   ❌ Likely Deny  │  HIGH        │  Required criterion unmet                     │
│   🔍 Peer-to-Peer │  LOW (<68%)  │  Conflicting evidence or ambiguous policy     │
│                                                                                   │
│   SLA routing:                                                                    │
│   URGENT / Concurrent → reviewer within 1 hour                                  │
│   EXPEDITED → reviewer within 4 hours                                           │
│   STANDARD → reviewer within 24 hours                                           │
└──────────────────────────────┬───────────────────────────────────────────────────┘
                               │
              ┌────────────────┼────────────────────────┐
              ▼                ▼                        ▼
          APPROVED          DENIED              PEER-TO-PEER
              │           Denial letter +       Scheduled call
              │           appeal rights         provider MD ↔ payer MD
              └────────────────┴────────────────────────┘
                               │
              ┌────────────────────────────────┐
              │       NOTIFICATION AGENT        │
              │  EHR in-basket · Letter         │
              │  CMS / payer portal update      │
              │  Audit log finalised            │
              └────────────────────────────────┘

Agent Breakdown

1. Orchestrator Agent

Model: Multi-modal foundation model (Claude / Gemini)

Responsibility Details
Urgency routing Standard (72hr) · Expedited (24hr) · Urgent/Concurrent (4hr) — same pipeline, different priority queue
Parallel dispatch Evidence Aggregator + Policy Interpreter run simultaneously to minimise latency
Conflict detection Compares sub-agent outputs before routing to Decision Support Agent
Escalation logic Applies confidence thresholds and conflict flags to determine reviewer queue

2. Evidence Aggregator

Tools: FHIR R4 API (Epic / Cerner), OCR engine, document parser, eFax ingestion

  • Fetches structured clinical data: diagnoses (ICD-10), procedures (CPT), medications, lab results, vitals
  • OCRs scanned documents (paper referrals, imaging reports, specialist letters)
  • Normalises all evidence into a structured evidence bundle with source citations
  • Flags evidence that is stale (e.g., lab result older than 12 months)

3. Policy Interpreter

Model: LLM with RAG over payer policy library · Tools: Vector store of payer PDF guidelines + structured JSON criteria sets

  • Looks up authorisation criteria for the requested service code (CPT / HCPCS / NDC)
  • RAG retrieval over unstructured policy PDFs; rules engine for structured JSON criteria
  • Returns a structured criteria checklist with each required evidence element and policy citation
  • Handles policy versioning — always retrieves criteria valid at the date of service

Build vs. Fine-tune: General-purpose LLM + RAG over a maintained policy library is preferred. PA criteria vary per payer and are updated quarterly. RAG avoids retraining costs and keeps criteria current.

4. Submission Readiness Agent

  • Performs a systematic gap analysis: what the policy requires vs. what evidence is present
  • Categorises each criterion: ✅ Met · ❌ Missing · ⚠️ Partial
  • Generates a provider-facing gap notice for missing items (specific, actionable)
  • Re-runs after provider responds with additional evidence

5. Decision Support Agent

  • Maps each evidence item to its corresponding policy criterion with explicit citation
  • Applies numerical threshold checks (e.g., HbA1c ≥ 8.0%, BMI ≥ 35)
  • Computes per-criterion pass/fail and an overall confidence score
  • Produces one of four structured recommendations: Approve · Approve with conditions · Likely Deny · Peer-to-Peer Required

Conflict Resolution Logic:

Conflict Type System Response
Evidence borderline (within 10% of numeric threshold) Flag for reviewer · Do not auto-approve
Provider attestation contradicts clinical notes Raise discrepancy flag · Escalate to reviewer
Policy criteria ambiguous / subject to clinical judgement Mark as "Peer-to-Peer Required" · Do not auto-decide
Requested service on exclusion list for this diagnosis Hard flag · Reviewer must override manually with reason

6. Legacy System Connector

Tools: FHIR R4 API, eFax gateway, payer REST/EDI APIs

  • Abstracts all external system integrations into a single connector
  • Reads prior PA history and patient clinical context from EHR
  • Submits final PA decisions to payer portals or via eFax
  • Writes status updates back to EHR so providers see real-time PA status

7. Notification Agent

Tools: EHR in-basket API, email, SMS, secure portal messaging

  • EHR in-basket notification to ordering provider at each state transition
  • Sends gap requests with specific missing evidence items (not generic rejection)
  • Delivers determination letter with policy citations
  • Triggers peer-to-peer scheduling for contested denials

Urgency Tiers

Tier Trigger Target Total Time Reviewer SLA
Standard Routine elective procedure / medication 72 hours 24 hours
Expedited Condition could worsen without timely treatment 24 hours 4 hours
Urgent / Concurrent Patient currently admitted or in active treatment 4 hours 1 hour

All tiers use the same pipeline — urgency flag sets queue priority and SLA alerts only.

Key Design Decisions

Decision Choice Rationale
Multi-modal vs. separate silos Single multi-modal model Clinical evidence is text + structured data + scanned PDFs
Policy retrieval RAG, not fine-tuning Criteria change quarterly; RAG over versioned policy store avoids retraining
Urgency handling Same pipeline, priority queue Avoids code duplication
HITL threshold All decisions require reviewer Regulatory requirement in PA
Auditability Immutable log + evidence citations HIPAA, appeals, and payer audit requirements
PHI handling De-identify before cloud LLM; BAA required HIPAA Safe Harbor or BAA-covered model endpoint
Legacy integration Dedicated Connector component Isolates fax/EDI/FHIR complexity from agent logic

Safety & Compliance

Threat Mitigation
PHI exposure to cloud LLM De-identify / tokenize patient identifiers before any cloud model call
Prompt injection via clinical notes Sanitise free-text fields in Security Layer; system prompt isolation
Stale policy criteria Policy library versioned and timestamped; always retrieve criteria valid at date of service
Audit trail gaps Immutable log created at intake; every agent action appended; finalised at decision
Appeals traceability Every evidence→criterion mapping stored with policy citation; retrievable for appeals

Data Flow

Provider submits PA request (EHR auto-trigger / portal / fax)
        │
        ▼
Security Layer: PHI de-identification · prompt injection guard · audit log init
        │
        ▼
Orchestrator: parse service code · set urgency tier · create context window
        │
        ├──► [PARALLEL] Evidence Aggregator ──► evidence bundle (FHIR + OCR)
        └──► [PARALLEL] Policy Interpreter  ──► criteria checklist + citations
        │
        ▼ (both complete)
Legacy System Connector ──► prior PA history + patient clinical context
        │
        ▼
Submission Readiness Agent
        │
   ┌────┴────────────────┐
   │                     │
COMPLETE            INCOMPLETE
   │            Notify provider of gaps
   │            ◄── provider responds
   ▼
Decision Support Agent → evidence → criteria mapping → confidence score
        │
        ▼
Clinical Reviewer Queue (SLA by urgency tier)
        │
   ┌────┴────────────────┬──────────────────┐
   │                     │                  │
APPROVED             DENIED          PEER-TO-PEER
   └─────────────────────┴──────────────────┘
                         │
        Notification Agent → EHR in-basket · letter · payer portal update
        Audit Log → finalise immutable record

PA State Machine

SUBMITTED → EVIDENCE_GATHERING → READINESS_CHECK
                                      │
                         ┌────────────┴────────────┐
                         ▼                         ▼
                    PENDING_INFO              UNDER_REVIEW
                (provider notified)        (SLA clock running)
                         │                         │
                provider responds      ┌───────────┼───────────┐
                         │             ▼           ▼           ▼
                         └──► re-run APPROVED   DENIED   PEER_TO_PEER
                              READINESS    │         │         │
                                          └────┬────┘         │
                                               ▼              │
                                            CLOSED  ◄─────────┘

Diagrams

End-to-End Agent Orchestration Flow

flowchart TD
    A1[Provider Portal\nStaff-submitted] --> B
    A2[EHR Auto-Trigger\nEpic / Cerner FHIR] --> B
    A3[Fax / Legacy Payer Portal\nOCR + eFax gateway] --> B

    B[Security & Compliance Layer\nPHI De-identification · Prompt Injection Guard\nBAA Verification · Audit Log Init]

    B -->|Sanitised PA package + urgency flag| C[Orchestrator Agent\nMulti-modal Foundation Model\nClaude / Gemini]

    C --> D[Evidence Aggregator\nFHIR R4 API · OCR · Document Parser\nLabs · Meds · Diagnoses · Notes]
    C --> E[Policy Interpreter\nRAG over Payer Policy Library\nCPT/ICD criteria · PDF guidelines]
    C --> F[Legacy System Connector\nEHR · Payer Portal · eFax\nPrior PA history · Status updates]

    D -->|Evidence bundle| G[Submission Readiness Agent\nGap Analysis: Evidence vs. Criteria\nMet · Missing · Partial]
    E -->|Criteria checklist + citations| G
    F -->|Prior PA history| G

    G -->|INCOMPLETE: specific gaps| H[Notify Provider\nEHR in-basket · Email · SMS]
    H -->|Provider responds| G
    G -->|COMPLETE| I[Decision Support Agent\nEvidence → Criteria Mapping\nConfidence Score · Recommendation]

    I -->|Approve HIGH conf.| J[✅ Recommend Approve]
    I -->|Approve MEDIUM conf.| K[⚠️ Approve with Conditions]
    I -->|Deny HIGH conf.| L[❌ Likely Deny]
    I -->|Conflict / Ambiguous| M[🔍 Peer-to-Peer Required]

    J --> N[Clinical Reviewer Queue]
    K --> N
    L --> N
    M --> N

    N -->|Approved| O[Determination: APPROVED]
    N -->|Denied| P[Determination: DENIED\nDenial letter + appeal rights]
    N -->|Peer-to-Peer| Q[Schedule Clinical Discussion\nProvider MD ↔ Payer MD]
    Q --> O
    Q --> P

    O --> R[Notification Agent\nEHR in-basket · Letter · Portal update]
    P --> R
    R --> S[Legacy System Connector\nSubmit to payer CMS · Finalise audit log]

Submission Readiness Gap Analysis

flowchart TD
    A[Evidence Bundle\nfrom Aggregator] --> C
    B[Criteria Checklist\nfrom Policy Interpreter] --> C

    C[Submission Readiness Agent\nSystematic gap analysis]
    C --> D{All criteria\nmet?}

    D -->|Yes| E[✅ COMPLETE\nProceed to Decision Support]
    D -->|No| F[Generate Gap Notice\nSpecific missing items per criterion]
    F --> G[Notify Provider\nEHR in-basket — actionable list]
    G --> H{Provider\nresponds?}
    H -->|Provides evidence| I[Re-run Readiness Check]
    I --> D
    H -->|No response within SLA| J[Escalate to Reviewer\nas Incomplete Submission]

Conflict Resolution Decision Tree

flowchart TD
    A[Decision Support Agent\nMaps evidence to policy criteria]
    A --> B{Any conflicts\nor flags?}

    B -->|Evidence borderline\n±10% of threshold| C[⚠️ Flag for Reviewer\nDo not auto-approve]
    B -->|Provider attestation\ncontradicts clinical notes| D[🚩 Discrepancy Flag\nEscalate to reviewer]
    B -->|Policy criteria\nambiguous / clinical judgement| E[🔍 Peer-to-Peer Required]
    B -->|Service on exclusion list\nfor this diagnosis| F[🚫 Hard Exclusion Flag\nReviewer must manually override]
    B -->|No conflicts\nAll criteria clearly met| G[Compute Confidence Score\nGenerate structured recommendation]

    G --> H{Confidence?}
    H -->|≥ 90%| I[✅ Recommend Approve]
    H -->|68–89%| J[⚠️ Approve with Conditions]
    H -->|< 68%| K[❌ Likely Deny]

PA Processing Timeline by Urgency Tier

gantt
    title Prior Authorization — Processing Timeline by Urgency Tier
    dateFormat HH:mm
    axisFormat %H:%M

    section URGENT — Target 4 hours
    Security + Ingestion              :u0, 00:00, 5m
    Evidence Aggregation + Policy Lookup (parallel) :u1, after u0, 20m
    Submission Readiness Check        :u2, after u1, 10m
    Decision Support + Recommendation :u3, after u2, 10m
    Clinical Reviewer SLA             :u4, after u3, 60m
    Notification + CMS submission     :u5, after u4, 5m

    section EXPEDITED — Target 24 hours
    Security + Ingestion              :e0, 00:00, 10m
    Evidence Aggregation + Policy Lookup (parallel) :e1, after e0, 30m
    Submission Readiness Check        :e2, after e1, 15m
    Provider gap response window      :e3, after e2, 120m
    Decision Support + Recommendation :e4, after e3, 15m
    Clinical Reviewer SLA             :e5, after e4, 240m
    Notification + CMS submission     :e6, after e5, 10m

    section STANDARD — Target 72 hours
    Security + Ingestion              :s0, 00:00, 15m
    Evidence Aggregation + Policy Lookup (parallel) :s1, after s0, 45m
    Submission Readiness + Provider Response :s2, after s1, 480m
    Decision Support + Recommendation :s3, after s2, 20m
    Clinical Reviewer SLA             :s4, after s3, 1440m
    Notification + CMS submission     :s5, after s4, 15m

PA State Machine

stateDiagram-v2
    [*] --> SUBMITTED : Provider submits PA request
    SUBMITTED --> EVIDENCE_GATHERING : Security layer clears · Orchestrator dispatches
    EVIDENCE_GATHERING --> READINESS_CHECK : Evidence bundle + Policy criteria ready
    READINESS_CHECK --> PENDING_INFO : Evidence gaps detected · Provider notified
    PENDING_INFO --> READINESS_CHECK : Provider submits missing evidence
    PENDING_INFO --> UNDER_REVIEW : Provider non-responsive — incomplete flag
    READINESS_CHECK --> UNDER_REVIEW : Evidence complete · Recommendation ready
    UNDER_REVIEW --> APPROVED : Reviewer approves
    UNDER_REVIEW --> DENIED : Reviewer denies
    UNDER_REVIEW --> PEER_TO_PEER : Reviewer requests clinical discussion
    PEER_TO_PEER --> APPROVED : Discussion outcome — approved
    PEER_TO_PEER --> DENIED : Discussion outcome — denied
    APPROVED --> CLOSED : Determination letter sent · CMS updated · Audit finalised
    DENIED --> CLOSED : Denial letter + appeal rights sent · Audit finalised

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