Prior authorization, a long-standing process used by health insurers to review the necessity of medical services and prescription drugs, has frequently been a point of contention for patients and providers due to associated delays and administrative burdens. However, a recent pledge by nearly 50 major health plans signals a shift, committing to streamline, simplify, and reduce prior authorization requirements across commercial, Medicare Advantage, and Medicaid managed care markets.
What is prior authorization?
Health insurers use prior authorization to review patient requests for coverage of medical services, procedures, or prescription drugs. Typically, when a doctor determines a patient could benefit from a specific test or procedure, the insurance company may require documentation to prove its necessity before agreeing to pay for it. This process involves submitting paperwork, which has often been manual (e.g., faxing), and may result in denials or necessitate an appeals process.
Typically, prior authorization is limited to various medical services and prescription drugs. Examples include procedures like MRI scans and heart operations, as well as expensive drugs like Wegovy and other GLP-1s.
Why is prior authorization necessary?
Insurers state that prior authorization helps to control the costs of care and ensure patients receive clinically appropriate treatments. It is also described as a way to ensure that member care is safe, effective, evidence-based, and affordable. Health insurers also argue it is one of their few defenses against increasing claim costs.
What are the issues with prior authorization?
Patients and providers have frequently complained about delays in medical care and administrative burdens caused by prior authorization requirements. Physicians find the review procedures slow and cumbersome. Others complain that the process can seem to be run entirely by computers, sometimes lacking human reviewers, and lack the experience or training to understand complex coverage requests.
Medicare Advantage plans, specifically, have been accused of delaying or denying members access to services through prior authorization, even when the requests met Medicare coverage rules. That’s led to numerous calls for prior authorization reform.
What prior authorization reform have insurers recently pledged undertake?
Nearly 50 health insurance plans signed a commitment to streamline, simplify, and reduce prior authorization. This prior authorization reform aims to connect patients more quickly to care while reducing administrative burdens on providers. Insurers will implement these modifications across various insurance markets, including commercial coverage, Medicare Advantage, and Medicaid managed care.
The participating health plans, which include several Blue Cross Blue Shield plans, Cigna, Humana, and UnitedHealthcare, have committed to the following:
Standardize Electronic Prior Authorization
Insurers will work towards implementing common, transparent electronic prior authorization. They will use FHIR® APIs to develop standardized data and submission requirements to support seamless processes and faster turnaround times. The goal is to have this new framework operational and available to plans and providers by January 1, 2027.
Reduce the Scope of Claims Subject to Prior Authorization
Individual plans agree to reduce medical prior authorization requirements as appropriate for their local markets. Demonstrated reductions are expected by January 1, 2026.
Honor Existing Prior Authorizations When Members Switch Plans
Starting January 1, 2026, when a patient switches insurance companies during an ongoing course of treatment, the new plan will honor existing prior authorizations for benefit-equivalent in-network services as part of a 90-day transition period. This action will help patients avoid delays and maintain continuity of care during insurance transitions.
Improve Communication and Transparency on Determinations
Health plans commit to clear explanations of prior authorization determinations, including support for appeals and guidance. These changes will be operational for fully insured and commercial coverage by January 1, 2026, with a focus on supporting regulatory changes for additional coverage types.
Expand Real-Time Responses
By 2027, insurers will answer at least 80% of electronic prior authorization approvals in real-time. This commitment also includes the adoption of FHIR® APIs across all markets.
Ensure Medical Review of Non-Approved Requests
Participating health plans affirm that all non-approved requests based on clinical reasons will continue to be reviewed by medical professionals. This standard is already in place and remains in effect.
Dashboards to Show Progress
Health insurers have also agreed to provide new data streams to demonstrate how they are improving these processes, with dashboards becoming available on the CMS and AHIP websites. Initial data reporting is expected by January 1, 2026.
What impact might that have?
This commitment by health plans toward prior authorization reform will impact both patients and providers.
Patients can expect faster and more direct access to care, reduced delays and greater continuity of care, and more transparent prior authorization processes. Providers should reduce administrative burden, improve workflows, experience faster responses to electronic requests, and attain medical review on all non-approved requests denied for clinical reasons.
Who is involved?
The following organizations have voluntarily joined the cause to improve the prior authorization process:
- AmeriHealth Caritas
- Arkansas Blue Cross and Blue Shield
- Blue Cross of Idaho
- Blue Cross Blue Shield of Alabama
- Blue Cross Blue Shield of Arizona
- Blue Cross and Blue Shield of Hawaii
- Blue Cross and Blue Shield of Kansas
- Blue Cross and Blue Shield of Kansas City
- Blue Cross and Blue Shield of Louisiana
- Blue Cross Blue Shield of Massachusetts
- Blue Cross Blue Shield of Michigan
- Blue Cross and Blue Shield of Minnesota
- Blue Cross and Blue Shield of Nebraska
- Blue Cross and Blue Shield of North Carolina
- Blue Cross Blue Shield of North Dakota
- Blue Cross & Blue Shield of Rhode Island
- Blue Cross Blue Shield of South Carolina
- BlueCross BlueShield of Tennessee
- Blue Cross Blue Shield of Wyoming
- Blue Shield of California
- Capital Blue Cross
- Capital District Physicians’ Health Plan, Inc. (CDPHP)
- CareFirst BlueCross BlueShield
- Centene
- The Cigna Group
- CVS Health Aetna
- Elevance Health
- Excellus Blue Cross Blue Shield
- Geisinger Health Plan
- GuideWell Mutual Holding Corporation
- Health Care Service Corporation
- Healthfirst (New York)
- Highmark Inc.
- Horizon Blue Cross Blue Shield of New Jersey
- Humana
- Independence Blue Cross
- Independent Health
- Kaiser Permanente
- L.A. Care Health Plan
- Molina Healthcare
- Neighborhood Health Plan of Rhode Island
- Point32Health
- Premera Blue Cross
- Regence BlueShield, Regence BlueShield of Idaho, Regence BlueCross BlueShield of Oregon, Regence BlueCross BlueShield of Utah, Asuris Northwest Health, BridgeSpan Health
- SCAN Health Plan
- SummaCare
- UnitedHealthcare
- Wellmark Blue Cross and Blue Shield
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