United promises another 30% cut to prior auths in 2026

Making strides with prior authorization reform

Prior authorizations are a major challenge for healthcare providers and patients, who say the process takes away from direct care, delays treatment and can even lead to injury and death in some cases.

Leading payers are recognizing the toll this utilization management strategy is taking on the healthcare industry. They maintain that prior authorizations are necessary to curb unnecessary care, especially as healthcare costs continue to soar, but reform is needed.

And they have already made major strides. America's Health Insurance Plans and the Blue Cross Blue Shield Association recently reported an overall reduction in the scope of prior authorizations, particularly in Medicare Advantage, where a 15% reduction was observed.

Some payers have also established secure data-sharing processes for better continuity of care.

Payers like United have also adopted so-called "gold cards," which exempt some providers from prior authorization requirements if they consistently adhere to evidence-based care guidelines. United reported that it plans to expand its nationwide gold-card program, which experienced a 40% increase in the number of qualified provider groups last year.

More payers are also using AI to streamline and automate prior authorizations. This is in part to CMS' Wasteful and Inappropriate Service Reduction, or WISeR, Model that requires the use of AI and machine learning for prior authorizations for select high-risk Medicare services in six states. The agency kicked off the WISeR Model at the start of the year.

Miles to go

Despite progress across several areas, prior authorizations remain one of the most burdensome processes in healthcare. Industry critics continue to call for stricter, faster and more transparent decision timeframes, more standardization of requirements and continued automation of the process.

United is among the many private payers committing to further advancements. However, the federal government is accelerating reform through new and proposed policies.

CMS has started implementing the 2024 Interoperability and Prior Authorization final rule, already requiring some health plans to use a standardized application programming interface to automate prior authorization approvals and reduce decision timeframes to a standard of 7 days (from 14) and 72 hours for expedited requests. Through the API, impacted payers must also provide a denial reason.

Next year, these plans will need to implement two more APIs -- one for payer-to-payer transferring of records during patient transitions and one for patient access to prior authorization information.

CMS also recently proposed expanding API requirements to include detailed drug prior authorization data, including denial reasons and dosages by Oct. 1, 2027.

Healthcare payers have generally supported CMS' policy efforts to improve prior authorizations, although they have expressed significant concerns with tight compliance timelines, high implementation costs and technical challenges in developing API infrastructure.

A recent report from the Peterson Health Technology Institute also warned of the limitations of AI for prior authorizations. Researchers said applying AI could exacerbate core issues with an already flawed process, leading to higher costs to the overall healthcare system.

Some lawmakers have also sought to repeal the WISeR Model, contending it will add administrative burden and limit access to care for Medicare beneficiaries.

While payers like United continue to pledge progress, the healthcare industry faces a delicate balancing act: streamlining a process that providers and patients find burdensome while addressing legitimate concerns about implementation challenges and unintended consequences.

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.