Insurers promise to make prior authorization processes easier for all parties

In potentially a rare dose of good news for providers about prior authorization, the health insurance industry has volunteered to scale back the process and introduce new accommodations, according to an announcement Monday.

As described by the insurance lobby and the Trump administration, which convened a meeting Monday at which a large segment of the insurance industry backed the changes, the new approach includes six reforms:

• Standardizing electronic prior authorization, with a target date of Jan. 1, 2027, for full implementation that would expand the scope of a Biden administration final rule.
• Reducing the scope of clams subject to prior authorization, thus eliminating the process for common procedures such as colonoscopies and cataract surgery, with approaches tailored to local markets and demonstrated progress seen by Jan. 1, 2026.
• Ensuring continuity of care when patients change plans, meaning no new prior authorizations for benefit-equivalent, in-network services during a 90-day care transition period, starting Jan. 1, 2026.
• Enhancing communication and transparency on determinations, meaning clear, easy-to-understand explanations, plus support for appeals and guidance on next steps, starting Jan. 1, 2026, for fully insured and commercial coverage, along with a regulatory push to expand the policy to other programs.
• Expanding real-time responses, with an applicable target rate of 80% of electronic prior authorization approvals by 2027 and elimination of paper forms and faxes.
• Ensuring medical review of non-approved requests, essentially affirming a standard that health plans say already is in place.

Plans that have signed on to the pledge span commercial, Medicare Advantage and Medicaid managed care markets, and cover 257 million Americans, according to an announcement by AHIP.

Manifesting improvement

As described during a news conference featuring Robert F. Kennedy Jr., secretary of HHS, and Mehmet Oz, MD, administrator of CMS, the reforms can help ensure patients get needed care without delays and also will streamline documentation to reduce waste and provider burden levels.

There may be 2,000 to 3,000 procedures that legitimately warrant prior authorization, down from 6,000 as deployed by various insurers, Oz said.

Some services merit prior authorization “for the betterment of patients to make sure these procedures are done correctly,” he said, citing knee procedures as an example.

“If the insurance companies can narrow down the scope of the pre-authorization requirements to really address the ones that are most likely to be abused, it will make the whole process more seamless,” he said.

Chris Klomp, director of Medicare, said there is room for streamlining the process in episodes of care that, for example, require multiple imaging and lab tests. Insurers typically want to authorize each of those services individually.

“That’s illogical,” Klomp said. “We know what the episode of care is. That episode of care arguably shouldn’t require authorization at all. But if it does, it should be done once, it should be done quickly, it should be done almost invisibly to the patient.”

One of the most important commitments in the insurance industry’s pledge is to promote interoperability, Kennedy said.

“Some of them demand correspondence by fax,” Kennedy said. “Some of them have their own portals on the internet where you upload the data and upload the patient’s records. Other ones require a conversation by telephone. And so every time a doctor’s office has to go through this process, they’re facing this kind of byzantine collection of procedures that they may not know for that particular insurance company.”

Holding plans accountable

The reforms are a voluntary initiative by the health plan industry, not a regulatory push by CMS. True enforcement thus will be limited, at least barring future regulations. Insurers have made similar pledges of prior authorization reform in recent years, including in 2018 and 2023.

“I think two things have changed. There’s violence in the streets over these issues,” Oz said, perhaps referring to the December 2024 fatal shooting of UnitedHealthcare CEO Brian Thompson. “This is not something that is a passively accepted reality anymore. Americans are upset about it.

“But I think the major factor is the industry realizes that some of the things that are preauthorized just don’t make any sense. And they now believe that because we could actually create an interoperable digital system, a connectivity, with very agreed-on standards, this actually can become a real-time process, which takes a lot of money out of the system.”

He added, “But the most important reality is the administration has made it clear we’re not going to tolerate it anymore. ‘So either you fix it or we’re going to fix it.’ And I think they wisely have decided that they should fix it.”

Transparency is key

Oz said CMS will monitor progress, publish data on plan participation and enforce rules to the degree it is authorized to do so if plans do not meet their stated obligations.

Klomp said metrics from the insurance industry will reflect the percentage decrease in codes requiring prior authorization and performance in areas such as the timeliness and transparency of authorizations and adoption of electronic standards for both medical and pharmaceutical procedures. The metrics will be published by AHIP and also will be available through CMS.

The public-facing dashboards need to promote responsibility for physicians as well as insurers, Oz said.

“The insurance companies have all sort of sung from the same hymnal that the major limiting factor [is] doctor’s offices’ abilities to provide digital data to them,” he said. “So we also want to keep doctors accountable. What percentage of doctors are actually able to send over a document [to receive authorization] in a timely fashion, so this claim can be adjudicated instantaneously?”

Next steps

Stricter regulation may be necessary if other insurers do not come onboard to ensure the initiatives cover all Americans, Oz said, and even those that already signed on “agree that there’s a possibility you may have to help nudge people, herd people, so [they’ll] make the right decisions in a timely fashion.”

Sen. Roger Marshall (R-Kan.), a physician, said significant progress has been made in drafting pertinent legislation that could be pushed further even if the voluntary approach proves successful.

“I do think we owe it to our patients to go ahead and codify something,” he said.