Ahead of the health insurance industry’s broader pledge to overhaul prior authorization processes, one Texas payer has already achieved a 7% prior authorization denial rate, with 100% of those denials upheld upon appeal.
On June 23, nearly 50 insurers committed to standardizing the electronic prior authorization process, targeting 80% real-time approvals by 2027 and specific reductions in prior authorizations by 2026. Additionally, starting in 2026, insurers will honor existing prior authorizations for patients changing plans during treatment and provide clearer explanations and support for appeals.
Chris Gay, CEO of Dallas-based Evry Health, joined the Becker’s Payer Issues podcast to discuss why the company joined the industry-wide commitment and how it’s already delivering on those promises. That episode will air next month.
Question: What was the driving force behind the industry’s decision to come together on this?
Chris Gay: We believe that these voluntary commitments around prior authorization standards are a step in the right direction. Why did it happen? Speaking personally, there’s a large amount of modernization that still needs to occur in our broader healthcare industry. There are still opportunities to improve customer service and reduce points of friction or latency. I believe the population has reached a point where their voices are being heard both inside organizations and outside. The consuming public wants better service, and that’s perfectly understandable.
Q: From Evry Health’s perspective, how challenging will it be to implement these changes?
CG: The reason this is so challenging for insurers is that we are responsible for a massive amount of compliance with medical quality, and we provide a vital service that is hugely complex. The big legacy insurers are pulled in 50 different directions by state legislatures. They should be given some flexibility since they are dealing with life and death situations, vast amounts of evidence-based literature, and a lot of complexity that would overwhelm most businesses.
We need to get to the point where physicians and their patients get answers the majority of the time in minutes, rather than days. At Evry Health, we want to drive prior authorization denials to zero, and we’re really close to achieving that. The broader industry is facing big challenges; a lot of my peers are still dealing with a medical industry that is overwhelmingly still run like it’s 1980, with 40% of the inbound prior authorization requests still sent by fax.
We’ve built the technology and software systems that allow us to do this. We’re already compliant with the things the company can be compliant with under these voluntary commitments. We do this electronically and in real time, and we’re happy to license that software to our competitors. We want to increase population health. The industry average for prior authorization denials is 25% to 35%. At Evry Health, our prior authorization denials in the past year were only 7%, and 100% of those were upheld upon appeal, which means we’re following the science and using evidence-based practices. In contrast, the industry average for denials being upheld on appeal is probably closer to 56%. So, it can be done, it’s just a hard lift.
Q: There are concerns that these reforms may shift administrative burden to other areas. How do you plan to ensure that these reforms lead to tangible improvements in both patient access and provider experience? How will success be measured?
CG: Ultimately, I think the success of these reforms will be measured by denial rates. For me, that’s the key performance indicator I would focus on over the long term: prior authorization denial rates should decline over time. If we’re working in partnership with physicians and providers and making sure that they submit requests the best and quickest way the first time, we can get them an answer faster. The goal is that we all serve the patient. But I understand the criticism. At Evry Health, we don’t make money by denying prior authorizations. Prior authorizations are driven by evidence-based care — what’s best for the patient according to scientific medical literature. That’s the only goal and the only criteria. As an industry, we’re independently accountable for our medical quality, and our prior authorizations are reviewed. We also have something called inter-rater reliability, where an independent committee reviews a statistically random sample of a company’s prior authorizations and medical decisions. The industry standard for inter-rater reliability is between 72% and 94%. At Evry Health, we’re at 100%.
We have a fantastic opportunity to address a nationwide concern. Our industry needs to move quickly, and if we do, we can address that gap between public perception and reality. Our opportunity to educate the public will be extended, and that can reap huge benefits across the industry and society.
