Prior authorization (PA) reform is no longer on the horizon — it’s here.
From the federal GOLD CARD Act to a wave of new state laws, policymakers are responding to years of pressure by pushing for faster timelines, fewer denials and more transparency.
For payers, these reforms are more than compliance checkboxes. They’re a high-stakes operational challenge — and a rare opportunity to modernize how you manage claims and utilization management (UM).
The Pressure is Rising
Recent policy changes are forcing payers to rethink claims operations:
- Gold carding for high-approval providers — Track performance to identify and exempt qualifying providers.
- Ban on retroactive denials — Strengthen front-end review to prevent costly errors.
- Chronic care flexibility — Adjust monitoring as some ongoing treatments no longer require new PAs.
- Specialty care & low-cost carveouts — Recalibrate cost management without these PA checkpoints.
- Faster turnaround times — Meet 24-hour urgent and 48-hour standard deadlines through automation and staffing.
- Transparency rules — Ensure AI use in UM is explainable, compliant and auditable.
For plans still relying on legacy systems and siloed processes, these shifts could trigger:
- Rising administrative cost burden (12% of insurer premiums go to admin expenses)
- Higher denial reversal rates (60% of initial denials overturned)
- Increasing claim denials (Initial denial rate now 11.8%)
- Skyrocketing MA administrative overhead (MA admin costs 5× higher than traditional Medicare)
Opportunity to Modernize
While these reforms add complexity, they also create a chance to reimagine operations. By streamlining manual steps, integrating workflows and enabling real-time data sharing across teams, payers can improve accuracy, speed decisions and build the transparency members expect.
Health plans that modernize claims operations can reduce processing times by up to 30% — ultimately lowering costs, strengthening provider relationships and gaining a competitive edge.
4 Steps to Act Now
- Evaluate provider contracts for operational alignment
Review agreements to ensure they support streamlined processes for gold carding, chronic care adjustments and other exemptions. Aligning expectations up front can reduce rework, improve provider satisfaction and safeguard compliance. - Assess vendor agreements for scalability
With fewer PAs as a gatekeeping mechanism, alternative cost-containment strategies like post-payment reviews will need to expand. Ensure third-party vendors have the capacity, SLAs and analytics capabilities to handle the potential increase in volume without delaying payment cycles. - Build in-house analytics capabilities
Strengthen internal tools to detect utilization trends, measure vendor performance and anticipate emerging cost drivers. AI/ML can be used to feed insights back into pre-payment processes, helping plans stay compliant and cost-effective in a post-PA environment. - Integrate claims and UM workflows
Breaking down silos between UM and claims departments enables consistent rules, shared data and faster resolution— improving compliance and creating a smoother experience for both members and providers.
From Compliance to Competitive Advantage
Bottom line: Payers that treat PA reform as a compliance exercise will survive. Payers that use it as an opportunity to modernize will lead.
Modernization isn’t just about avoiding penalties — it’s about addressing contracts, vendors, analytics and integration to thrive in a shifting market. If you’ve been looking for a way to stay ahead of the competition and the next wave of reforms, now is the time to act.