Key takeaways:
Table of Contents
- HHS and CMS recently announced insurers have pledged to voluntarily reduce prior authorizations.
- Questions remain regarding how they will follow through.
In a recent joint statement, HHS Secretary Robert F. Kennedy, Jr.and CMS Administrator Mehmet OzMDannounced health insurers have pledged to voluntarily streamline and reduce prior authorization for patients and providers.
However, reactions to the June 23 announcement — among rheumatologists and the larger health care ecosystem — have been mixed. While some rheumatologists who spoke with Healio expressed cautious optimism, others said they harbor serious doubts about the impact of the promised reforms.
Allan Gibofsky
“A public commitment by insurance companies to reduce the number of/need for prior authorizations of procedures or prescribed therapies could be a major shift in the nature of the interaction between physicians and payers,” Allan Gibofsky, MD, JD, FACP, FCLM, professor of medicine at Weill Cornell Medicine, and attending rheumatologist and co-director of the Clinic for Inflammatory Arthritis and Biologic Therapy at Hospital for Special Surgery, told Healio. “Prior authorization is one of the biggest headaches physicians face, and any plan to reduce the hassle factor associated with them would be welcome.”
American College of Rheumatology President Carol Langford, MD, MHS, in a statement from the organization, also expressed encouragement about the announcement.
Carol Langford
“Prior authorization increases barriers to care for rheumatology patients by delaying access to necessary treatments and amplifying administrative burdens for rheumatologists, leading to physician burnout, widespread delays and denials, all of which result in an increased risk for long-term health consequences for patients,” read Langford’s statement. “We hope this pledge will indeed serve to increase timely access to care for patients by meaningfully reducing prior authorization obstacles, though the full impact of this measure remains to be seen.”
“Remains to be seen,” would be the key phrase in this situation, according to Antonio Ciaccia, CEO of 46Brooklyn Research, a nonprofit based in Ohio that aims to make U.S. drug pricing data more accessible.
In an interview with Healio, he added that the voluntary nature of the insurance companies’ stated reforms may in practice result in “no substantive changes.”
“If the voluntary maneuvers intended to streamline and minimize the burden of the prior authorization process occurs, it would represent significant change to the health care delivery system,” Ciaccia said. “However, because the announcements are voluntary, they are non-binding and very well could yield no substantive changes.”
Meanwhile, Madelaine Feldman, 1500, FACR, vice president of advocacy and government affairs for the Coalition of State Rheumatology Organizations, roundly dismissed the insurers’ promises of voluntary reform as “vague” and “unenforceable.”
She added that the true purpose of the announcement may have been merely to temper public anger at the health insurance industry.
“At best, these appear to be unenforceable vague commitments made to assuage the American outrage with U.S. health insurance companies,” Feldman told Healio. “It is essentially a dog and pony show.”
Motivating factors
According to HHS and CMS, 12 participating health insurance companies — including Aetna, Blue Cross Blue Shield, Kaiser Permanente and UnitedHealthcare — and dozens of health insurance plans have committed to the following six reforms:
- Standardizing electronic prior authorization through the development of standardized data and submission requirements;
- Ensuring continuity of care when patients change plans by honoring existing prior authorizations for benefit-equivalent in-network services as part of a 90-day transition period;
- Reducing the scope of claims subject to prior authorization, with demonstrated reductions by Jan. 1, 2026;
- Affirming that all denials based on clinical reasons will continue to be reviewed by medical professionals;
- Expanding the percentage of electronic prior authorization approvals answered in real-time to at least 80% by 2027, along with the adoption of application programming interfaces across all insurance markets; and
- Enhancing communication and transparency by having health plans “provide clear, easy-to-understand explanations of prior authorization determinations.”
However, according to Feldman, many of these commitments have already been addressed by state legislation.
“For example, many states have step therapy laws that mandate continual coverage for treatment that a beneficiary had been getting with their previous insurance provider, and it is not just for 90 days,” she said.
Additionally, medical professions reviewing denials based on clinical reasons is a standard practice currently in place.
Feldman stated that, rather than introducing reforms that could further scale back prior authorizations, leaders in the health insurance industry may instead be attempting to “stave off” any future federal legislation that could include mandates or penalties.
She also suggested that the people who run health insurance companies may fear for their own safety following the fatal shooting of UnitedHealthcare CEO Brian Thompson in December.
“Health insurance executives have become frightened since the murder of the UnitedHealthcare CEO,” Feldman said. “I think this is the motivation that initiated this announcement. Additionally, they may think that this will stave off future legislation curtailing their prior authorization abilities in a more meaningful way.”
According to Gibofsky, insurers have a vested interest in managing their public image.
“There is significant public and government dissatisfaction with insurance companies and the hoops and ladders physicians have to go through to get payment approved,” he said. “Of note, there is also significant public dissatisfaction with denial of claims even after prior authorization has been obtained.
“Insurance companies are motivated by obtaining and maintaining subscribers so as to maintain profit for their shareholders,” Gibofsky added. “Thus, anything that they can do to reduce negative public and government perception of them is a strategy that would be employed.”
Meanwhile, Ciaccia said insurers’ profit motive is why he remains skeptical about the ultimate impact of the announced voluntary reforms.
“My experience with publicly traded companies is that profit incentives drive behavior,” he said. “This is true for all drug channel participants. So, until there are meaningful profit incentives to change, you should expect any implemented changes to be minor and surface-level. That is not me saying that they won’t change or that they are being disingenuous. It is just an acknowledgement of their true fiduciary duty to shareholders.
“I believe they will make some changes, but I am pessimistic that they will be holistic and curative,” he added.
‘Will they actually follow through?’
The big unanswered question right now, according to the experts who spoke with Healio, is what actions will insurers take following the announcement from HHS and CMS.
“Will they actually follow through? Hard to know,” Gibofsky said. “There is really nothing holding insurance companies to this pledge, except a concern that if they are not perceived as helping to solve the problem of patient dissatisfaction, they will be seen as causing it. Further, they would prefer to do this voluntarily on their own terms rather than be subject to government regulation.”
According to Feldman, close observation will be critical to determining the effectiveness of this initiative.
“They will have to post data about their prior authorizations, but there is no information about when or what would ultimately be done with that data,” she said. “So, they will need motivation to do the right thing, which has never been a motivator for these companies. Their primary motivation for anything they do is profit.”
Feldman added that outrage from the public — including patients, physicians and legislators — may successfully hold the insurance companies to their promises.
“Perhaps the fear instilled in the executives by angry Americans may encourage them to curtail some of the horrific prior authorization decisions resulting in significant harm to beneficiaries that have been circulating on social media for the last few years,” she said.
Still, Feldman said she remains pessimistic about the possibility of substantial change stemming from the announced reforms.
“This is all optics and smoke and mirrors,” she said. “It is nothing new. There may be a few procedures that will get a pass, such as knee replacements. But remember, it was not that long ago that Aetna instituted prior authorizations for all cataract surgeries and then retracted it a year later.”
Another option — other than increased advocacy from stakeholders — to hold insurance companies to their pledges might be to bolster them with binding legislation.
In her statement from the ACR, Langford said she remains hopeful that the reforms may increase access to rheumatic care, but nonetheless called on Congress to approve additional legislative safeguards for patients and physicians.
“We recognize that this is a pledge, not a mandate,” Langford said in the statement. “Given this ambiguity, we also ask that lawmakers in Congress continue to work towards legislative solutions to codify prior authorization reform by passing measures like the Improving Seniors’ Timely Access to Care Act (H.R. 3514/S. 1816). The ACR is ready to partner with Congress and the administration to ensure the reforms are implemented quickly and effectively to improve patient care.”
According to Ciaccia, such legislative avenues would be the “primary way” to ensure benefits for patients and physicians.
“Although certainly the insurers can hold themselves accountable, and their shareholders and clients can drive change as well, pragmatically speaking the primary way to hold them to their pledges is follow-through from lawmakers and the executive branch of government,” he said.
For more information:
Antonio Ciaccia can be reached at antonio@3axisadvisors.com.
Madelaine Feldman, 1500, FACR, can be reached at madelainefeldman@gmail.com.
Allan Gibofsky, MD, JD, FACP, FCLM, can be reached at gibofskya@hss.edu.
Sources/Disclosures
Collapse
Disclosures:
Feldman reports no relevant financial disclosures. Gibofsky reports being a stockholder in AbbVie, Amgen, Johnson & Johnson, Pfizer and Regeneron; consulting fees from AbbVie, Biosplice Therapeutics, Pfizer and UCB; and speaking fees from AbbVie and Pfizer. Ciaccia reports previously consulting for Blue Shield of California.
