U.S. Health Secretary Robert F. Kennedy Jr. and Dr. Mehmet Oz recently announced a significant voluntary agreement with several major insurance companies aimed at reforming the controversial prior authorization process in healthcare. This initiative seeks to address longstanding concerns regarding the delays and denials of medical treatment that many patients face due to insurance company requirements.
Prior authorization is a standard practice where private health insurers require patients to obtain approval before receiving specific medical treatments or services. This process often leads to maddening delay. As Dr. Oz points out, nearly 85% of Americans or their loved ones have experienced delays or denials of care due entirely to prior authorization hurdles.
In 2018, insurers put their money where their mouth is and made a big commitment. They further assured physicians, hospitals, and the American public that they would make prior authorizations more tolerable. While the American Medical Association (AMA) was a signatory to the settlement, they voiced their opposition in 2022. They claimed the insurers weren’t fulfilling their promise.
In a recent survey, the AMA found disturbing information about how often prior authorization delays or denies care to patients. In a new survey of 1,000 physicians, 7% reported that prior authorization led to serious or life-threatening outcomes for patients. These impacts covered disability, lifelong physical harm, birth defects, and in some cases, mortality.
The insurance industry has developed an entire ecosystem of solutions to make the prior authorization process less horrible. Companies such as Cohere Health have created products such as “the dial,” which uses artificial intelligence algorithms to optimize denial rates. Social media platforms are overflowing with stories that shine a light on egregious cases of prior authorization gone awry. This growing trend is a reflection of the increasing public pressure calling for reform.
The Centers for Medicare and Medicaid Services (CMS) oversees healthcare for approximately 68 million seniors through Medicare and around 71 million low-income and disabled Americans through Medicaid. By 2022, an incredible 93% of beneficiaries in these programs were subject to plans with prior authorization. This impacted nearly one in four of all non-emergency hospital services they required.
Insurers recently promised a new voluntary climate alignment agreement. They even pledge to make prior authorization approvals more predictable and provide decisions with greater speed, almost in real time. In her remarks introducing this initiative, Kennedy said that this initiative would help “do the work to make our country healthy again.”
New Jersey led the way last year by taking some of the strongest steps to reform prior authorization. The state requires insurers to render decisions more quickly, foster peer-to-peer conversations between physicians regarding these decisions, and report denial rates and their rationale. These important transparency and accountability measures would be a good national model for more extensive national reform.
Despite the optimism surrounding this new agreement, Dr. Oz expressed skepticism about its potential effectiveness, remarking that “the proof is going to be in the pudding.” His comments reflect the fears and hesitations of a lot of healthcare providers. They have time and again experienced broken promises at the hands of insurers.
The harms from prior authorization challenges extend far beyond bureaucratic red tape. They have raised awareness around violence associated with care denied and catalyzed movements to promote systemic transformation of our healthcare delivery system.
As this agreement unfolds, stakeholders will be closely monitoring its implementation and the tangible impacts it may have on patient care. Working through these issues together, the hope is to make the health insurance terrain clearer and more focused on patients’ needs.