Health insurance companies to make changes to prior authorizations
HHS secretary Robert F. Kennedy and Dr. Mehmet Oz announced that major insurance companies have agreed to cut down and streamline prior authorizations
Large health insurance companies vowed to cut down the use of and improve a common tool to vet requests before letting doctors bill for medical services or prescriptions.
UnitedHealthcare, Blue Cross Blue Shield, Cigna, Kaiser Permanente, Humana and other health insurance companies on June 23 announced plans to “streamline, simplify and reduce prior authorizations.” Doctors and patients have long criticized prior authorizations, saying in surveys and government oversight reports the practice routinely delays or denies care.
The changes to prior authorization will be phased in over the next year and a half, the companies said. In all, insurers said the changes would apply to 257 million Americans covered by private commercial insurance, Medicare Advantage and Medicaid managed care plans.
Health and Human Services Secretary Robert F. Kennedy Jr. and Centers for Medicare & Medicaid Services Administrator Mehmet Oz praised the insurance reforms during a Monday news conference in Washington, D.C. The were joined by Eric Dane, who previously starred in “Grey’s Anatomy.”
Oz and Kennedy noted insurance companies are voluntarily making these changes, but Oz said the federal government could adopt rules and regulations to enforce change if the insurance companies don’t make promised improvements.
“I am optimistic, hopeful that we won’t have to do that, but it’s always in our back pocket if we need it,” Oz said.
What is prior authorization?
Under prior authorization, doctors or hospitals must ask a patient’s health insurance company before care such as an operation or prescribing certain prescription drugs. Doctors complain the process is burdensome and it’s often used to delay or deny medically necessary medical care for patients. Insurance companies counter that authorizations are a vital tool to prevent unnecessary tests and medical care that inflates medical bills for families.
During his confirmation hearing in March, Oz said prior authorizations were “misused in some cases” by private Medicare plans and needed to be addressed. He suggested a list of services with clear descriptions in which private Medicare plans could use preauthorization.
Nearly 1 in 5 adults with health insurance said they experienced a prior authorization problem in the past year, according to a 2023 survey from KFF, a health policy nonprofit.
Oz said private insurance companies that administer Medicare Advantage plans partially or fully denied 3.2 million preauthorization claims in 2023.
Insurers vow timely decisions
The health insurers vowed changes will bring faster access for patients and fewer challenges, according to a statement shared by America’s Health Insurance Plans, a trade group.
The group said health insurers would “reduce the scope of claims” subject to prior authorization. Insurers also said they would implement measures to ensure continuity of care when patients switched insurance plans and give clearer explanations on decisions.
The large health insurers also will seek to standardize computer systems to process prior authorization requests. The idea is to put “patients over paperwork” and allow insurers, doctors and hospitals to exchange digital information in a standard way, Oz said.
In a statement, AHIP President and CEO Mike Tuffin said the health plans are “making voluntary commitments to deliver a more seamless patient experience” and allowing doctors to focus on patient care.
Are insurers ‘really going to step up?’
This isn’t the first time the federal government has called attention to health insurance approvals for care.
In 2018, during President Donald Trump’s first term, larger insurers and major medical groups agreed to terms on how prior authorizations should be handled. But the effort did not make significant progress.
Oz acknowledged past efforts have not yielded meaningful change to prior authorization. But he said the public is demanding change.
“There’s violence in the streets over these issues,” said Oz, a reference to the December 2024 assassination of UnitedHealthcare CEO Brian Thompson.
“This is not something that is a passively accepted reality any more. Americans are upset about it,” Oz added.
U.S. Rep. Greg Murphy, a North Carolina Republican and a physician, said he often had to console crying patients whose care was denied by an insurance company.
But he also said “some blame” must be shared by doctors for habits such as ordering unnecessary tests.
He said he’s glad insurance companies have agreed to address prior authorization. But he said the proof will be in how these companies follow through.
“Being a surgeon, I’m a skeptic,” Murphy said. “Are they really going to step up and do things, or are they doing something to placate an audience?”
(This story has been updated to add new information.)
