On June 23, over 50 health insurers pledged to standardize and reform prior authorization processes, both to reduce the burden on providers and provide better access to care for patients. Because these developments may affect individuals insured by Medicare, Medicaid, and marketplace coverage, counselors may find the following information helpful. 

The Ongoing Prior Authorization Debate: Payer–Provider Tensions and Patient Impact 

Prior authorization strategies have long been a contentious issue between health insurers and providers. Though insurers contend that prior authorization helps reduce costs and guarantees that patients receive appropriate care, providers argue that the process adds to administrative burdens and can cause delays in care. The approval process often takes weeks or months and increases the administrative workload for health care providers. When insurance companies deny coverage requests, patients are forced to choose between altering their treatment plan or bearing the full financial burden of care.

In a recent survey from the American Medical Association (AMA), 93% of providers said prior authorization delays access to necessary care, and 89% said it increases physician burnout. In addition, over 80% of providers said issues with prior authorization have led patients to abandon treatment, and 29% said they believed prior authorization requirements led to serious adverse patient outcomes, such as hospitalization.  

Insurers Pledge to Reduce Prior Authorization Burden 

In this new reform initiative, the health insurance organizations pledged to: 

• standardize the electronic prior authorization process.
• reduce the number of medical and mental health services requiring prior authorization.
• honor any existing authorizations when patients change health plans during treatment.
• increase transparency and communication around authorization decisions and appeals.
• minimize delays with real-time responses to prior authorization requests.
• ensure medical professionals review unapproved requests.

The voluntary changes could impact individuals covered under Medicare, Medicaid, and marketplace insurance programs, which currently implement prior authorization practices with minimal regulatory oversight. This new set of commitments also extends to job-based health plans, which provide insurance for the majority of Americans.  

Insurance companies have also committed to developing standardized electronic request systems for health care providers and preserving existing authorizations when patients transition between health plans, eliminating the need for patients to restart the approval process when changing insurance coverage. 

In a press conference announcing the initiative, Health and Human Services Secretary Robert F. Kennedy, Jr., said the federal government pushed health plans to sign the pledge. Centers for Medicare & Medicaid Services (CMS) Administrator Mehmet Oz also noted that there has been growing discontent over prior authorization and overall health care access.  

Though insurers have promised to voluntarily make changes to prior authorization, Oz said there are also federal government opportunities that could push insurers into changing their processes if no progress is made. For example, some current and pending CMS regulations apply new limits to the prior authorization process, including ones finalized by the Biden administration in January 2024. CMS also plans to create a public dashboard to track insurers’ compliance with their promises in the initiative.  

Potential Benefits for Counseling Practices: 

• Reduced administrative burden: The pledge to standardize electronic prior authorization processes and provide real-time responses could significantly decrease the time counselors and their staff spend on paperwork and follow-up calls, allowing more focus on direct patient care.
• Improved access to mental health services: The commitment to reduce the number of mental health services requiring prior authorization could make it easier for clients to access needed counseling services without delays, particularly for treatments that are currently subject to extensive review.
• Better care continuity: The promise to honor existing authorizations when patients change health plans means clients won’t face treatment interruptions due to insurance transitions, which is especially important for ongoing therapeutic relationships.
• Enhanced transparency: Increased communication around authorization decisions could help counselors better understand why certain treatments are denied and how to successfully advocate for their clients’ needs.

 
Challenges and Uncertainties: 

• Implementation skepticism: Counselors should prepare for the possibility that changes may be limited or slow to materialize.
• Variation across plans: Since each insurer will independently implement these changes, counselors may still face inconsistent requirements across different insurance companies, maintaining some administrative complexity.
• Technology-adoption requirements: The electronic prior authorization improvements depend on counselors and practices adopting new technology systems, which may require training and potential upfront costs.

NBCC will monitor and report on this initiative’s implementation.