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Health Affairs This Week places listeners at the center of health policy’s proverbial water cooler. Join host Jeff Byers, editors from Health Affairs Publishing, and guests as they discuss health policy’s most pressing news and trends.
Hello and welcome to Health Affairs This Week. I'm your host Jeff Byers. We are recording on 09/24/2026. Real quick breaking news. We have an insider event in October coming up, October 21.
Jeff Byers:It is not on our website yet, but just to give listeners a heads up, it is going to be on Up Coding. Confirmed speakers include Richard Kronick and Matthew Fielder. Moderating that event is Kathleen Haddad, who is here on the pod today to discuss prior authorization. Kathleen, welcome back to Health Affairs This Week.
Kathleen Haddad:Hey, Jeff. So good to be with you again.
Jeff Byers:Yeah. So we're gonna talk about prior authorization today. The aforementioned Health Affairs Insider published a trend report earlier this year, I think it was q one or q two, on the current landscape of prior authorization. It's a great document, and developments continue in the prior authorization space. So we wanted to point to some of the recent highlights in that space.
Jeff Byers:Kathleen, to start us off, what's the big debate or tension in prior authorization? You know, where are we seeing a decent amount of change?
Kathleen Haddad:So, Jeff, the tension is between, obviously, insurance companies and providers who have to spend so much of their time engaged in prior authorization activity. And I think that, the the report, which I know you were involved in, the insider report, found that 90% of all the prior auth requests end up being approved. And so it suggests that the majority of these decisions, you know, are are simple confirmation. And so the whole, well, not the whole, but CMS and, has orchestrated a kind of effort to, improve the process. A lot of I know what you wanna talk about today is about that, so go ahead.
Kathleen Haddad:Fire. Yeah. Fire away.
Jeff Byers:So we do know there are a lot of denials, though, and there's potentially variations across market. Is is that correct?
Kathleen Haddad:Yeah. KFF published a report recently that found one in eight of the standard prior auth requests, across MA, Medicaid, managed care, and the ACA marketplaces are are, denied. So that's about, I think, if I have my math right, about 12%. I tend to think in percents. Then it does vary across insurance types so that insurers in MA, it's about 11%, in Medicaid about 13%, and ACA plans had highest rate of denials at about 17%.
Kathleen Haddad:And even within or across health plans, the denial rates vary. So this report found that, the rates for elephants were five percent compared to seventeen percent for UnitedHealth.
Jeff Byers:Yeah. And we'll we'll dive into the, insurers a little bit later. But back to CMS. So CMS in May announced the addition of electronic prior authorization as an initiative underpinning its health tech ambitions, stating that health systems, hospitals, physician practices, EHR vendors, and digital health developers are now joining payers as a unified coalition aligned around a single mission, making electronic prior authorization work end to end on time for every patient. So what are the goals here?
Jeff Byers:I mean, they do say what the goals are, but, you know, if you expand on those and what are the expected outcomes?
Kathleen Haddad:So, Jeff, it's an interesting development that has kind of popped up this year, well, over the last several years. It's been a longstanding lobbying effort by the AMA and other clinician groups and was the result of a final rule published at the end of twenty twenty four and all of these provisions take effect this year. So this effort applies to MA plans, Medicaid chip plans and marketplace plans, but not commercial insurance. But it does three the rule does three main things. It shortens the time frame within which insurers must supply a prior auth decision to three days for urgent requests and a week for non urgent.
Kathleen Haddad:And before, providers and patients could be waiting weeks and doctors could spend hours playing phone tag trying to do peer to peer sessions with an insurance to get coverage. The rule also requires insurers to provide a specific reason for the denial, which which didn't always happen previously. Interestingly, beginning in next January 2027, the prior auth processing must be embedded in EHRs. So in this situation or this scenario, the electronic record is supposed to alert providers to services requiring prior auth and then send the request and documentation to the insurer immediately. Some services might allow for real time processing even.
Kathleen Haddad:So to implement this, CMS is requiring providers and insurers to adopt APIs, application program interfaces so that all the programs involved in the processing can talk to each other and accept and process the data.
Jeff Byers:Yeah. So so it sounds like they're trying to streamline things a bit, utilize technology to maybe quicken turnaround times for request, maybe take some people out of the equation if it's known information.
Kathleen Haddad:Yeah. And take paper out of the equation. So I used to go happen so much of it by fax.
Jeff Byers:Yeah. Yeah. I was unrelated to any of this. I was remembering file cabinets. I mean, file cabinets are still around, don't get me wrong.
Jeff Byers:But I was remembering when I worked at a company, we had we printed off the home page and then signed it every day and then put it in a file cabinet for records. And I've wondered, like like, years and years printed out home pages, which are essentially worthless. Anyways
Kathleen Haddad:Well, I'll I'll give you an interesting tangent, though.
Jeff Byers:Okay.
Kathleen Haddad:The the yesterday, I just had a provider tell me that they they had to get a prior auth for some service I needed, actually, medication. And they said, oh, it was easy. So, hopefully, that's a sign of things to come. We'll see.
Jeff Byers:Alrighty. Yeah. That sounds great. And we're taking the the tyranny of big paper out of it. Yeah.
Jeff Byers:Where were we?
Kathleen Haddad:Pip paper can be tyranny. That's for sure.
Jeff Byers:Yeah. Yeah. No one likes a paper cut.
Kathleen Haddad:Yeah. I have one right here. We were talking about the program will move next year into the Medicare Promoting Interoperability Program for hospitals and the MIPS program for clinicians, and CMS estimates, well, I think the AMA actually estimates that it will save approximately 15,000,000,000 over the decade.
Jeff Byers:So this doesn't apply to commercial insurance. So what's happening there to improve, what some might consider cumbersome prior authorization process?
Kathleen Haddad:So, Jeff, that's an interesting question. The example I gave you about my own care was what reflected the private insurers trying to respond to CMS effort to encourage them to move forward into using electronic processing and to follow the same rules that the CMS implemented this year. So, for the government regulated plans. And so anyway, the, they're asking insurers to adopt a voluntary pledge to improve the process. So the pledge involves a commitment to do several things, and that includes to standardize electronic prior auth by using the APIs so that they the data flow process works well and to reduce the volume of medical services subject to prior authorization, to honor existing authorizations when people, change insurance so that continuity of care is maintained, to publicly report denial rates and other data, to expand, the ability to use real time approvals so that most requests are covered in real time, and finally, to ensure that medical professionals review any denials.
Kathleen Haddad:There had been some concern that some of the denials were not handled by actual people, and so that's part of this new effort by CMS.
Jeff Byers:So in our wonk world, TM, how are insurers responding? So we we've seen a lot there.
Kathleen Haddad:So one one of the pieces of news in this space was that Aetna announced it would bundle prior auth for cancer treatments, And, you know, insurers responding to CMS's pledge or request have been announcing that they're cutting prior auth. So one of the big announcements came from United, which said it was cutting 1,700 codes, which they said was about 30%. So my question, I always ask 30% of what? And Right. There's the devil is in the denominator.
Kathleen Haddad:The, Substack writer, Wendell Potter, who our listeners may be familiar with, he is a former insurance executive who transformed into a self described whistleblower on the health insurance industry. He takes issue with this report. He says that the codes eliminated from prior, authorization amount to only about 2% of the medical services that United covers, And he says some of the codes are listed multiple times across different plan types and insurance sectors and that the real number is closer to 800 or a thousand. And he also says that some of the many of the eliminated codes are seldom used by providers and that new codes are being added, for instance, for a certain genetic and molecular testing.
Jeff Byers:Okay. His words, not ours. Right. I have never heard of Wendell Potter, but we'll put a link in the show notes just because that could be interesting for listeners. So because it's a podcast, we're almost out of time, but we have to talk about it.
Jeff Byers:AI. Stat News found that Medicare's AI prior auth pilot was rushed. Again, their words, not mine. Reporter Brittany Trang. What's the concern with AI in general, Kathleen, in terms of prior auth, and what should researchers and listeners know about that as the space evolves?
Kathleen Haddad:So evidently, CMS is using a new model, allegedly, actually in real life CMS is implementing a new innovation model and for the first time requiring in this model that prior authorization be used in traditional Medicare. And so one of the advantages of traditional Medicare, I think this background is important, is that you can go to any provider and most recommended services are covered unless the doctor has a patient sign a form letting them know that Medicare may deny payment, in which case the patient would be responsible. So traditional Medicare uses Medicare administrative contractors to review payment against established coverage criteria. And so this happens after the service is provided. But under this new model, the WISER model, CMS is implementing prior auth in traditional Medicare in six states under a five year innovation center model.
Kathleen Haddad:And the participants, what's unique here is the participants are not providers, they are tech vendors. And so for a set of 17 service types, prior auth use is being required and the tech vendors get bonus payments if they implement the process according to CMS efficiency rules, which include the short turnaround times similar to what CMS is requiring in other government programs. And so, Jeff, the question I have is, is this an effort by CMS to begin more widespread prior authorization in traditional Medicare? And if so, how will it save money if the MACs are already essentially doing the same thing but after the service is provided? So, you know, the implications to me seem like perhaps CMS believes the MACs aren't working well or the coverage criteria are not adequate or that AI can improve prior auth across all of healthcare and that the model will test this theory.
Kathleen Haddad:But in any case, GAO has faulted CMS for how it set up the project, and that then reported on documents obtained through the Freedom of Information Act, that reveal some problems. So do you wanna hear about what what those problems are?
Jeff Byers:Yeah. Please do.
Kathleen Haddad:So the stat report found, that, CMS put the contractor for Washington State on a correction plan for not meeting the turnaround times. And this is what stat found from these, freedom of information documents that were released. One of the contractors didn't know that part a services can be provided in outpatient settings, which clogged up the process. The American Hospital Association and one of the, STEP contractors had, before the program took off in January of this year, they advocated to CMS to delay implementation, saying it was unrealistic to expect a working product by the implementation date. And, you know, CMS had only announced the project in, I believe it was early twenty twenty five.
Kathleen Haddad:They said poor implementation, delayed surgeries and pain control, and one physician reported having three patients cry in pain awaiting a decision for spinal procedures. And again, in previous times this would not have happened because the MACs, made their coverage decisions after the provision of service. So, policy experts are questioning whether the payment method incentivizes, these, vendors to deny care because the payment is partially related to denied claims, And it appears that the guardrail for that would be whatever CMS rules are. One Mac reported it would need funding, more funding to continue supporting its wiser contractor. You know, it's a new program, and CMS says it will publish data on turnaround times and quality in a forthcoming report.
Jeff Byers:Okay. So more to come in this space. We'll put a link in the show notes to the stat report. It is under a paywall. They do good work at stat.
Jeff Byers:It is under a paywall though, as a heads up. And also, someone else that does a good work, also under a paywall, is Health Affairs Journal, and I wanna do a quick shout out. Seamless transition. We're doing a campaign this fall for a limited time. You can purchase a two year digital subscription to Health Affairs Journal and receive a third year free with code one free year at Health Affairs at checkout.
Jeff Byers:So if you have been thinking about, I'd love to have Health Affairs Journal, but I'd really love a deep discount. This is your time. This offer is limited to October 15, so check that out. Kathleen, thanks again for joining us today on Health Affairs This Week to discuss prior authorization. Anything else you wanna mention on the way out?
Kathleen Haddad:Jeff, just that, I I really appreciate your, making, bringing this topic up for the podcast because so much has happened in the recent year of, on this topic and more to come.
Jeff Byers:Yeah. More to come, and that does not mean the trend report is obsolete under insider. You can also purchase the insider product. Check that
Kathleen Haddad:out. Just sets everything up. That really, you know, gives you the basis for understanding this whole field.
Jeff Byers:Yeah. It's like soup to nuts, trend report, podcast. Listener, you take this information, run with it.
Kathleen Haddad:Good job.
Jeff Byers:Well, with that, Kath thank you. Thank you. Kathleen, thanks for joining us today on Health Affairs This Week. If you, the listener, enjoyed this episode, send it to a friend. It'll give you a good karma to maybe get a chance to buy those Oasis tickets.
Jeff Byers:The email's coming. I promise. And with that, we'll see you next week.