Some Insurers Cut Back on Prior Authorizations as Clawbacks Ramp Up
By Jarrod Fowler, MHA, FMA Director of Healthcare Policy and Innovation | April 6, 2023

According to articles published in Modern Healthcare, UnitedHealthcare plans to eliminate around 20% of its prior authorization requirements by the third quarter, including those for commercial, Medicare Advantage, and Medicaid managed care plan members. Additionally, UnitedHealthcare will launch a “gold card” program next year that will allow certain providers with high prior authorization approval ratings to avoid going through the prior authorization process.

Modern Healthcare also reports that Cigna claims to have removed the need for prior authorization for nearly 500 services since 2020, with about 6% of services continuing to be subject to prior authorization requirements.

These changes come on the heels of a federal rule that, starting in 2026, will require insurers to explain prior authorization denials and provide a plethora of data on their prior authorization processes and outcomes, while also imposing time requirements for responding to prior authorization requests for Medicare Advantage and Medicaid plans. This does not mean that prior authorization has ceased to be an issue for physicians. Research shows that excessive and inappropriate prior authorization demands frequently result in negative outcomes for patients and negative business outcomes for medical practices.

Furthermore, while some plans may be cutting back on the total number of prior authorizations that they require, Modern Healthcare reports that insurance companies are ramping up clawbacks of provider payments. In December of 2022, clawbacks reached 2.3% of debit accounts receivable, the highest on record since January 2019, when the rate was closer to 1%. Some of these changes are attributed to practices such as downcoding disputes.

Ultimately, the FMA believes that prior authorizations and retroactive denials, a form of clawbacks, need to be addressed legislatively. Insurance companies that authorize claims should not be able to claw back money later on the basis that the patient was uninsured at the time the authorization request was granted. If insurers authorize a claim, physicians should be able to count on being reimbursed for services duly rendered. The FMA also supports legislation that would allow physicians to receive prompt notifications from insurers about the status of their prior authorization requests, as well a mechanism for physicians to override inappropriate prior authorization requirements such as “step therapy” or “fail first” protocols when the physician knows that doing so is in the patient’s best interest.