Federal health officials on Monday touted pledges they have received from the health insurance industry to streamline and reform the prior authorization process for Medicare Advantage, Medicaid Managed Care and Affordable Care Act Health Insurance Marketplace plans which account for most insured Americans.
Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. and Centers for Medicare & Medicaid Services Administrator Mehmet Oz took part in a roundtable discussion with insurers in which the payers pledged commitments to six key reforms to the prior authorization process.
Health care providers must obtain approval from an insurer before a specific service is covered, and they’ve criticized that process for being time-consuming and a drag on providing health care.
According to Oz, the roundtable included the CEOs of health insurance companies who cover about 75 percent of Americans. The CMS administrator said he would like fewer services to be subject to preauthorization.
Medicare Director Chris Klomp gave the example of colonoscopies or cataract surgeries as procedures that could be moved out of the prior authorization process.
Referencing the biblical passage that reads “the meek will inherit the earth,” Oz said in a press briefing that health insurance companies and hospital systems have “agreed to sheath their swords, to be meek for a while.”
Major health insurers including Cigna, UnitedHealthcare and Aetna said they would be simplifying the process and reducing the number of health care claims subject to prior authorization.
The voluntary commitments include standardizing the electronic prior authorization process; reducing the number of claims subject to prior authorization; ensuring continuity of care when patients change plans; enhancing communication and transparency when it comes to determinations; increasing the numbers of real time responses; and ensuring medical review of denied requests.
By cutting down on red tape, Oz said “tens of billions of dollars of administrative waste” could be saved.
Kennedy acknowledged that similar commitments have been made by the health insurance industry in the past, but said this instance was different because of the number of insurers who have signed on to the voluntary agreement.
“The other difference is we have standards this time. We have, we have deliverables. We have specificity on those deliverables, we have metrics, and we have deadlines, and we have oversight,” said Kennedy.
Oz suggested another difference was a change in Americans’ current consensus on prior authorization compared to the past.
“I mean, there’s violence in the streets over these issues. This is not something that is a passively accepted reality anymore. Americans are upset about it,” said Oz. “I think the major factor is the industry realizes that some of the things that are preauthorized just don’t make any sense.”
“The health care system remains fragmented and burdened by outdated manual processes, resulting in frustration for patients and providers alike. Health plans are making voluntary commitments to deliver a more seamless patient experience and enable providers to focus on patient care, while also helping to modernize the system,” said Mike Tuffin, president and CEO of the health insurance trade association AHIP.
According to a 2024 survey by the American Medical Association, 91 percent of physicians said the prior authorization process can lead to negative clinical outcomes and 82 percent said it could lead to patients abandoning their course of treatment.
Acknowledging the voluntary nature of the commitments, Oz said, “If the insurance industry cannot address the needs of preauthorization by themselves, there are government opportunities to get involved. They might not be as nimble, but they will be used if we’re forced to use them.”
Actor Eric Dane, who recently disclosed his diagnosis of amyotrophic lateral sclerosis (ALS), appeared at the press conference to put his support behind the move. Dane famously played a physician on the show “Grey’s Anatomy.”
“I’m here today to speak briefly as a patient battling ALS, also known as Lou Gehrig’s disease. When that diagnosis hits and you find out that you’re sick, your life becomes filled with great uncertainty,” said Dane. “The worst thing that we can do is add even more uncertainty for patients and their loved ones with unnecessary prior authorization.”
Sen. Roger Marshall (R-Kan.) and Rep. Greg Murphy (R-N.C.) joined Kennedy and Oz at HHS headquarters. Both lawmakers have previously introduced legislation seeking to reform and streamline the prior authorization process under Medicare.
Marshall and Murphy, both physicians, touched on how the prior authorization process has negatively impacted their patients.
“I vividly remember a patient I once had scheduled for an infertility surgery. She’d taken time off work and arranged help at home, only to be told the morning of a procedure that her insurance company had added another step to the prior authorization process, abruptly canceling her surgery,” Marshall recounted. “Now, whether you need a hip replacement or a heart catheterization, many patients feel their critical care has been delayed by an opaque and burdensome prior authorization process.”
The senator from Kansas said he was still committed to codifying preauthorization reforms despite the commitments made Monday.
Describing himself as a “skeptic,” Murphy said he would be keeping an eye on insurers to make sure they’re “doing what they’re saying they’re going to do.” He touched on the role of artificial intelligence in today’s prior authorization process.
“Artificial intelligence should help this tremendously, tremendously, and it should take out a lot of the variances that happen between doctors, hospitals, regions of the country, etc. But remember, artificial intelligence only is as good as what you put into it,” said Murphy.
Physicians have previously expressed concerns about the role of artificial intelligence in the preauthorization process, with some evidence suggesting AI-use results in higher rates of denials.
In March, Murphy joined with bipartisan House colleagues in reintroducing the Reducing Medically Unnecessary Delays in Care Act. Among other measures, the bill would bar Medicare administrative contractors from denying coverage of health care services solely because it does not meet an evidence-based standard and would require input from practicing physicians prior to establishing clinical criteria for preauthorization review.
