Plans Agree to Prior Auth Reform. Physicians and Business Groups Want Measurable Results

Health insurers appear to have gotten the message that their prior authorization practices have to change. Health plans have been facing significant and very public pressure around their policies on the utilization management tactic that they say is necessary to ensure their members’ care is safe, effective, evidence-based and affordable.

Yesterday the nation’s leading healthcare plans agreed to streamline, simplify and reduce the prior authorization process, according to leaders at the Department of Health and Human Services and AHIP, the trade association representing the health insurance industry.

Shawn Gremminger

“The level of frustration in the general public and, ultimately, in elected officials, is so high AHIP felt like they absolutely have to do this,” Shawn Gremminger, president and CEO of the National Alliance of Healthcare Purchaser Coalitions, said in an interview. “There is not a meeting that AHIP holds with a member of Congress or staff in which prior authorization doesn’t come up. I think insurers recognize that they’ve got to change the way that they do their [prior authorization] work.”

Plans such as Aetna, Cigna, UnitedHealthcare and the Blue Cross Blue Shield plans have signed on to provide faster and more direct access to medical services through six new commitments. The full list plans that have signed on can be found here

The plans have agreed to:

• standardize electronic prior authorization, implementing common and transparent submissions by Jan. 1, 2027;
• reduce the scope of claims subject to prior authorization by Jan. 1, 2026;
• ensure continuity of care when patients change plans beginning Jan. 1, 2026;
• enhance communication and transparency of determinations by Jan. 1, 2026;
• expand real-time response for at least 80% of electronic prior authorization approval in 2027; and
• ensure medical review of non-approved requests.

“These measurable commitments – addressing improvements like timeliness, scope, and streamlining – mark a meaningful step forward in our work together to create a better system of health,” Kim Keck, president and CEO, Blue Cross Blue Shield Association, said in a statement.

The changes will be implemented across insurance markets, including for those with commercial coverage, Medicare Advantage and Medicaid managed care, and are expected to impact about 257 million Americans.

Eric Musser

Eric Musser, MPH, vice president of federal affairs at NCQA, believes streamlining prior authorization processes is essential to reducing care delays and easing administrative burdens for both patients and clinicians. NCQA is a private, nonprofit organization dedicated to improving healthcare quality.

“While it's voluntary, we really respect the pledge as a commitment that the status quo isn't acceptable, and I think there's an industry need for both innovation in the space, but also accountability and oversight and the outcomes of those prior authorizations both the original decisions and any appeals of initial decisions,” he said in an interview.

Plans Need Follow-Through

Physician organizations, such as the American Academy of Family Physicians and the American Medical Association, along with employer groups, have long said that changes needed to be made to reduce the burden on providers.

These organizations say it’s critical for health plans to follow through on these commitments to ensure meaningful and lasting improvements. Leaders from the American Academy of Family Physicians, the AMA and the Healthcare Leadership Council said in statements that they plan to collaborate with insurers to measure results from these efforts.

Leaders from the AMA point out these commitments are similar to those that health plans had agreed to in 2018 in a consensus statement, including reducing the volume of prior authorization requirements, protecting care continuity as patients transition to new health plans, improving transparency, and automating the process.

But that effort didn’t lead to meaningful change. “Despite widespread calls for meaningful reforms and the insurance industry’s past promises, the prior authorization process remains costly, inefficient, opaque, and too often hazardous for patients,” Bobby Mukkamala, M.D., president of the AMA, said in a news release. “That is why the AMA enthusiastically supported recent federal regulations that applied reforms to limited health insurance markets, including Medicare Advantage.”

Health plans have long said that prior authorization reduces the costs of expensive treatments and improves care. Officials from the AMA, however, point to a 2021 study published in Health Affairs that found prior authorization instead adds costs to healthcare. This study, which focused on prior authorization for prescription drugs, found that payers, manufacturers, physicians, and patients together spend approximately $93.3 billion annually on implementing, contesting, and navigating utilization management.

A recent AMA survey released earlier this year of 1,000 physicians found that practices on average complete 39 prior authorization requests per physician per week and spend about 13 hours completing these requests each week. Additionally, 29% of those surveyed said that prior authorization has led to a serious adverse event for a patient in their care, and 23% said this led to a patient’s hospitalization.

Reliance on Outdated Technology

Gremminger said what he found most helpful about the new effort was a commitment to use better technology to make private authorization more seamless and more timely. Insurers have made a commitment to the development of standardized data and submission requirements for electronic prior authorization.

He said many insurers still rely on outdated technology. “I hear from employers and clinicians all the time that they are told they need to fax these documents and then wait 72 hours for the insurer to review it on paper and then fax it back to them,” he said. “Either it's intentional and it's designed to slow things down, or it’s just incompetence. The fact that Fortune 10 companies can't operate on online services is just absurd.”

Insurers said the new technology framework includes the development of standardized data and submission requirements (using FHIR APIs, which allow for the exchange of health data) that will support seamless, streamlined processes and faster turn-around times. It is expected to be operational and available to plans and providers by Jan. 1, 2027.

Although artificial intelligence is not specifically mentioned in the proposed, it is likely insurers’ efforts will include AI. A 2022 McKinsey analysis suggested that AI could automate 50% to 75% of manual tasks associated with prior authorization.

“I'm not an AI expert. But I do think that AI can be used to speed things up, looking at the clinical record, the plan documents, and identifying pretty quickly whether something is appropriate,” Gremminger said. “But we’ll have to see whether they follow through on the commitment of an actual human being, ideally a clinician, making the critical decision.”

Artificial intelligence is increasingly being used as a way to help insurers speed up prior authorizations. But critics have said that AI has been used to deny care without review. UnitedHealthcare, in particular, has faced claims that it used AI to quickly deny claims without a medical review. The American Civil Liberties Project has tracked at least 15 reports and five lawsuits against UnitedHealthcare for denying patient care.

But UnitedHealthcare hasn’t been the only insurer accused of denying needed care through prior authorization. Between 2019 and 2022, UnitedHealthcare, Humana, and CVS each denied prior authorization requests for post-acute care at far higher rates than they did for other types of care for Medicare Advantage beneficiaries, found an investigation of Medicare claims last year by the U.S. Senate Permanent Subcommittee on Investigations.

Musser said the public policy world is still grappling with the responsible use of AI in healthcare operations. “The use of advanced technology has started to infiltrate into the prior authorization process, he said. “While that has immense benefit for streamlining and making the process more efficient and more seamless, it does have the potential for unknown or unintended consequences. There's both the desire for efficiency and burden reduction, but also knowing that people are innovating in this space, and that in that innovation, we need to ensure that patient safety and access to care is timely.”