Providers skeptical of insurer plans to reduce prior authorizations

By Nona Tepper / October 16, 2023

Providers are lobbying Congress, investing in new technologies and renegotiating contracts with insurers in response to rising prior authorization demands—despite of some of the largest carriers promising to cut back on preapproval rules.

Their tactics highlight provider skepticism of moves by UnitedHealth Group, Cigna, Blue Cross Blue Shield of Michigan and other insurers to lift some precertification requirements. Providers question whether these new policies will actually reduce administrative burden or if insurers are mostly engaged in a public relations campaign to forestall government intervention.

“If you’re driving too fast and you see a police car, you have time to slow down,” Scripps Health CEO Chris Van Gorder said. “The insurance companies are seeing a police car and they’re slowing down.”

A moving target

In March, UnitedHealth Group announced it would eliminate 20% of prior authorization requirements. The next day, the company issued two provider bulletins saying it would require additional precertifications for some oncology and outpatient surgical procedures for commercial enrollees.

UnitedHealthcare declined to make an executive available for an interview.

Policymakers should make note of these actions and not be distracted by the public announcements of relaxed prior authorization policies, said Dr. Barbara Jung, a gastroenterologist in Seattle and president of the American Gastroenterological Association. The gastroenterology society is lobbying Congress to enact more guardrails against overuse of prior authorization, she said.

“It really was a bait and switch,” Jung said.

Lawmakers have sent letters to UnitedHealth Group subsidiary UnitedHealthcare, CVS Health subsidiary Aetna, Cigna and other Medicare and Medicaid carriers this year asking for information about how they handle patient requests for treatment and about their use of artificial intelligence to review claims. Bills are pending in Congress to require insurers to accelerate prior authorization decisions for Medicare Advantage beneficiaries.

The health insurance trade association AHIP did not respond to an interview request.

Insurers tend to be scrapping prior authorization requirements for uncommon services, said Chip Kahn, president and CEO of the Federation of American Hospitals, which represents investor-owned health systems.

“When they say they're going to take 10% or 20% of the codes off, frequently those aren't the codes that are the busy codes in terms of medical services for patients that need prior authorization,” Kahn said.

Without greater insight into denial and approval rates, not to mention regulations about what may be subject to prior authorization, providers won't trust that insurers are seeking appropriate medical management, not simply trying to avoid paying claims, said Lane Jackson, a shareholder in the consulting division of LBMC who oversees providers’ revenue cycle management services.

“There is a belief among providers that the authorization reduction may manifest itself in increased other denials. It is a little bit of a wait-and-see,” Jackson said.

In December, the Centers for Medicare and Medicaid Services proposed a regulation to require insurers administering federal health programs to publicly report data on prior authorization decisions.

CMS published a final rule in April that requires Medicare Advantage insurers honor prior authorization approvals for the full course of a patient’s treatment and to accept those carried over from enrollees' previous insurers for 90 days.

This policy shift won't affect many patients because switching carriers during treatments is unusual, said Michael Bagel, associate vice president of public policy at the Alliance of Community Health Plans, a trade group for nonprofit health insurance companies.

“I don’t think the impact will be as widespread as maybe it is perceived to be,” Bagel said. “But I think it's just a good thing to check the box to remind providers that once it's been approved, that will continue.”

Aspirus Health is not confident that insurers’ prior authorization cuts will reduce administrative barriers to care and payment, CEO Matthew Heywood said. The Wausau, Wisconsin-based nonprofit health system is renegotiating with insurers and seeking less onerous prior authorization rules, he said.

“These announcements are a press game,” Heywood said. "They hear the noise and they're getting pockets of resistance, and I think that they're trying to deflate the balloon before we actually start analyzing the real data and bringing it together.”

Providers take action

Other providers are considering cutting themselves off from Medicare Advantage entirely, in part because of prior authorizations.

Two medical groups affiliated with the San Diego-based Scripps Health—Scripps Coastal and Scripps Clinical Medical Group—will not contract with any Medicare Advantage insurers next year, Van Gorder said. Likewise, Brookings Health System in Brookings, South Dakota, and Bend, Oregon-based St. Charles Health System have threatened to cut ties with all Medicare Advantage insurers.

Some providers are investing in new technology to help them track prior authorization requests and claims denials.

Nemours Children’s Health, a nonprofit academic medical center based in Jacksonville, Florida, is using artificial intelligence to automate claims reviews in response to rising denials by Medicaid insurers.

Community Health Systems in August announced it will implement Oracle's enterprise resource planning software to centralize utilization review and claims adjudication services across its 76 hospitals. The Franklin, Tennessee-based company aims to collect data about insurers' prior authorization decisions and administrative requirements, and to use the information to push back on denials, Chief Financial Officer Kevin Hammons said during the for-profit health system’s earnings call in August. Community Health Systems declined to comment.

“We saw a little pause by the payers during the pandemic, in terms of some of their tactics,” Hammons said at the time. “They slowed down denying claims and pushing on observations as they had fewer claims to pay. But now, as volumes are coming back, we’re certainly seeing a higher number of denials and more pressure from the managed care payers.”