UnitedHealthcare, the largest private payer in the U.S., plans to eliminate almost 20% of its current prior authorizations starting this summer, the company announced Wednesday.
The decision, which preempts impending federal regulation aimed at streamlining the process, was cheered by provider groups for its potential to ease documentation burdens on physicians.
The code reductions will begin in the third quarter and continue through the rest of the year for UnitedHealthcare’s commercial, Medicare Advantage and Medicaid businesses. UnitedHealthcare will also implement a national “gold card” program in early 2024, allowing certain providers whose prior authorization requests are consistently approved to perform most procedures without needing to get the health plan’s green light.
Prior authorization, or preauthorization, is a process in which a physician must get approval from an insurer for medication or treatment before administering it. The authorizations have become increasingly common among payers, who say it’s a way to curb unnecessary medical spending.
However, physicians argue that the additional administrative steps delay needed services, and increase paperwork and provider costs, resulting in burnout.
In a recent survey, over a third of physicians said the requirements led to a serious adverse event for a patient, such as hospitalization or death. Roughly 60% of doctors said prior authorization requirements resulted in resources being diverted to less effective treatments or additional office visits.
Along with Wednesday’s prior authorization revamp, UnitedHealthcare also said it plans to take additional steps, like evaluating prior authorization codes, in the next several years to improve automation and faster decision-making for the approvals.
Other major U.S. payers have also taken recent steps to pare back prior authorization processes.
Scott Josephs, national medical officer for Cigna, told Healthcare Dive that Cigna has removed prior authorization reviews from nearly 500 services since 2020. Currently, about 6% of medical services are subject to prior authorization for Cigna customers, and Cigna continuously reviews services and devices to see if prior authorization is still necessary, according to Josephs.
An Aetna spokesperson said that the CVS-owned payer consistently reviews its prior authorization policies and has implemented a number of changes to decrease the number of prior authorization requirements, including a gold card program. Last year, Aetna rolled back prior authorization requirements on cataract surgeries, video EEGs and home infusion for some drugs.
The changes have automated prior authorizations by more than 10% last year, and Aetna expects to more than double that in 2023, the spokesperson said.
Molina, Humana and Elevance did not respond to a request for comment.
Despite the recent rollbacks, almost 80% of physicians said insurers’ prior authorization requirements rose from 2021 to 2022, according to the MGMA. Physicians said they’ve been contending with escalating prior authorization requirements since 2016.
Provider groups said they welcomed UnitedHealthcare’s policy changes, but it won’t be clear if it will move the needle on reducing administrative burden on physicians until they’re implemented later this year.
American Medical Association President Jack Resneck said the group is “cautiously optimistic” about UnitedHealthcare’s changes, while Molly Smith, group vice president for policy at the American Hospital Association, called them a “much-needed step forward.”
“We will work with our members to carefully monitor plans’ implementation of these policies to ensure they do indeed remove unnecessary barriers to care for patients and wasteful administrative burden on providers,” Smith said in a statement.
“We welcome opportunities to reduce the number of prior authorization requests on medical groups. But it remains to be seen how it will be rolled out,” said Anders Gilberg, SVP of government affairs for the Medical Group Management Association. “So while we appreciate the intent, the implementation is going to be absolutely the most critical thing to really assess if this is going to reduce administrative burden — or is this just a move by [UnitedHealthcare] to get out front of some of the recent rules and guidance from the CMS.”
The CMS proposed a rule late last year that would require health insurers to automate prior authorization and return decisions more quickly. The rule received broad support from both payer and provider groups, especially for stipulations allowing for smoother data exchange, and its inclusion of MA plans.
MA plans were exempt from previous prior authorization proposals, despite government research finding some MA plans routinely denied appropriate prior authorization requests. A 2018 audit by the HHS Office of Inspector General found MA plans ultimately approved 75% of requests that were originally denied following appeal.
Some states have also taken steps to limit prior authorization. Pennsylvania recently passed a law requiring commercial insurers and Medicaid plans to provide a more streamlined approval process for non-urgent and emergency services.
And in Texas, provisions of its “Texas gold card bill” came into effect in October, exempting physicians with a 90% prior authorization approval rate for certain services from prior authorization requirements.