The broader health insurance industry has announced a series of commitments to streamline, simplify and reduce prior authorization requirements across commercial, Medicare Advantage and managed Medicaid plans covering 257 million Americans.
“The health care system remains fragmented and burdened by outdated manual processes, resulting in frustration for patients and providers alike,” AHIP President and CEO Mike Tuffin said June 23. “Health plans are making voluntary commitments to deliver a more seamless patient experience and enable providers to focus on patient care, while also helping to modernize the system.”
The nearly 50 participating insurers will work to implement a standardized submission process for electronic prior authorizations, with the goal to be operational and available to plans and providers by January 1, 2027. The industry is aiming for at least 80% of electronic prior authorization approvals to be provided in real-time in 2027.
Individual plans will commit to specific reductions to prior authorizations, with reductions rolling out by January 1, 2026.
Beginning January 1, 2026, when a patient changes insurance companies during a course of medical treatment, the new plan will honor existing prior authorizations for benefit-equivalent in-network services as part of a 90-day transition period.
Insurers will also provide clear explanations of prior authorization decisions, including support for appeals and guidance on next steps, which is expected to be operational for fully insured and commercial coverage by January 1, 2026.
“These commitments represent a step in the right direction toward restoring trust, easing burdens on providers, and helping patients receive timely, evidence-based care,” CMS Administrator Mehmet Oz, MD, said in a June 23 statement. “We applaud these voluntary actions by the private sector, which is how these types of issues should be solved. CMS will be evaluating progress and driving accountability toward our shared goals, as we continue to champion solutions that put patients first.”
Prior authorization reform has been a top-of-mind issue for health systems and physicians for years. A recent survey conducted by the American Medical Association found that nearly 90% of physicians reported that the process somewhat or significantly increases burnout. Physicians and their staff spend 13 hours each week on prior authorizations and 40% have staff who work exclusively on the process.
In recent years, major insurers like UnitedHealthcare and Cigna have cut more than 20% of the procedures requiring prior authorization. The AMA said, however, that “most physicians are not seeing a difference.”
In January 2024, CMS finalized a rule to streamline the prior authorization process. Beginning primarily in 2026, certain payers will be required to include a specific reason when denying requests, publicly report certain prior authorization metrics and send decisions within 72 hours for urgent requests and seven calendar days for standard requests.
