Major payers say they cut prior authorizations by 11%

Where payers are making headway

AHIP and BCBSA highlighted progress in three categories.

First, participating payers reduced the scope of prior authorizations by reducing requirements across markets, including a more than 15% reduction in Medicare Advantage. The report said payers cut requirements for services "with clear, evidence-based clinical guidelines, demonstrated improvements in patient outcomes and consistent utilization patterns among providers."

Second, some committed payers have established secure data-sharing processes to achieve continuity of care. Participating payers agreed to honor existing prior authorizations for benefit-equivalent, in-network services for a 90-day transition period. Enhanced data sharing and customer service support to manage continuity of care requests are gaining momentum, the report indicated.

Third, participating payers made progress with enhanced communications by using consumer-friendly language and delivering straightforward notices and determinations, AHIP and BCBSA reported.

The next phase of prior authorization reform

These are just "important initial steps," Mike Tuffin, AHIP's president and CEO, said in a statement. The payers are still "working toward the shared goal of delivering answers at the point of care whenever possible -- a goal that will require both plans and providers to eliminate manual processes and adopt real-time electronic data sharing," he added.

In this next phase of the multi-year commitment, participating payers plan to focus on standardizing electronic prior authorization submissions and expanding real-time responses by Jan. 1, 2027.

"During the past 10 months, the Blues made significant, measurable strides toward delivering on our promise to make this process faster, simpler and more transparent," said Kim Keck, CEO of BCBSA. "Moving forward, we will focus on our commitment to address 80% of electronic prior authorization requests in real-time, at the speed of care."

The focus on digitizing the process aligns with new CMS requirements. The CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F) requires most payers to transition to electronic prior authorizations over the next two years.

The rule also seeks to streamline the process through mandated decision response times, denial transparency and public reporting of payer prior authorization metrics, including approval and denial rates, on their websites.

CMS is also running an Innovation Center model, called the Wasteful and Inappropriate Service Reduction, or WISeR, Model, that leverages AI for prior authorizations in six states.

Providers still concerned about prior authorizations

But whether the recent improvements reported by leading payers and greater adoption of electronic processes will be enough to quell provider concerns remains to be seen.

Healthcare providers have long complained about the prior authorizations, which AHIP and BCBSA maintain are "a critical safeguard that helps ensure their members' care is safe, effective, evidence-based and affordable."

The American Medical Association's latest prior authorization survey found that most providers report care delays (93%) and treatment abandonment (82%) as a result of prior authorizations. More than one in four physicians also reported a serious adverse event, including patient disability and death.

Not only are physicians concerned that the requirements are not evidence-based, but they also complain about the administrative burden. AMA reported that practices spend 13 hours a week completing prior authorizations, on average. Meanwhile, three-quarters reported more prior authorization denials.

Providers worry that the push toward electronic and AI-driven prior authorizations will only make denials worse.

AMA President Bobby Mukkamala, M.D., said in a statement to RevCycle Management that the organization appreciates payers' follow-through on their commitments, but more needs to be done.

"Announced reductions in the number of services subject to prior authorization are a positive first step, but physicians and patients must experience a meaningful, real-world decrease in administrative burden and care delays," he stated.

"Transparency is essential to ensuring accountability and progress. Individual health plans should publicly report their specific metrics and improvements so physicians can understand how prior authorization requirements are changing within the plans they work with every day."

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.