Dive Brief:
- Major insurers have cut 11% of prior authorizations after committing to roll back the controversial processes last year, according to major trade groups.
- The reduction equates to 6.5 million fewer prior authorizations for U.S. patients, AHIP and the Blue Cross Blue Shield Association, which surveyed insurers for an update on compliance, said Tuesday.
- Health plans also reported progress on making it easier for members who change insurance plans to maintain approvals, and on improving communications about prior authorization decisions.
Dive Insight:
Prior authorizations require providers to get the green light from insurance company before they can provide certain treatments or prescribe certain drugs. Insurers argue that the preapprovals are a valuable tool for preventing unnecessary medical care and controlling rising spending. But they’re loathed by providers, who say onerous preauthorization policies contribute to burnout, slow down the provision of medical care and lead to worse health outcomes.
Major insurers pledged to voluntarily pare back overly burdensome prior authorization processes last summer, including eliminating certain preapprovals and honoring existing prior authorization approvals from a member’s previous health plan.
The move was heralded by the industry and by regulators in the Trump administration, who said they played a key role in securing the commitments. However, providers were uncertain that the pledge would lead to concrete action, given its voluntary nature.
Now, AHIP and the BCBSA are providing an update.
According to the trade groups’ survey, plans have cut prior authorizations by 11% in their markets, including a reduction of more than 15% in Medicare Advantage.
Insurers have faced especially harsh criticism for their use of preapprovals in MA, given that prior authorizations aren’t allowed in traditional Medicare and that the majority of denied requests for care are overturned upon appeal.
Along with prior authorization cuts, many plans are also establishing data sharing processes to coordinate continuity of care, even for members who switch between coverage, AHIP and the BCBSA said.
Plans are also improving their communications around prior authorization decisions, including by providing clearer information about how to appeal.
Participating insurers are also making progress towards components of the pledge that take effect in 2027, the trade groups said. By next year, payers said they would standardize data and submission requirements for electronic prior authorizations, and be able to answer at least 80% of electronic prior authorization requests in real-time — a “substantial technical and operational undertaking,” according to AHIP and the BCBSA.
Major payers have been slowly pruning their prior authorization processes over the last few years amid rising animus against the industry for its role in delaying and denying medical care. The wave of negative public sentiment crested after the killing of UnitedHealthcare CEO Brian Thompson in late 2024, and likely contributed to the pledge last summer from a coalition of four dozen influential for-profit and nonprofit insurers.
The changes will affect more than 250 million Americans given the reach of the insurers involved, AHIP and the BCBSA said.
Yet hospitals and doctors are wary that the pledge may be little more than lip service. For example, major payer and provider groups agreed on the need to improve prior authorizations in 2018. But eight years later, getting treatment approval is still a huge problem for providers, many of which say prior authorization requirements have actually been increasing.
And the voluntary nature of the commitments give payers wiggle room. For example, some of the pledges are not yoked to specific targets, including how many prior authorizations insurers will cut.
Still, Trump administration officials have said they’re tracking compliance closely and are open to regulation if insurers fail to meet the new standards.
