Five major companies pledge faster, electronic prior authorizations

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Dive Brief:

• Five major companies have joined a government-led pledge to streamline the prior authorization process, according to a new announcement from the CMS and the Department of Labor.
• The companies — Amazon, Axon Enterprise, Google, Meta and Oracle — pledged to implement electronic prior authorizations in their self-funded health plans to speed up the process and better enable data sharing. 
• They join nearly 60 health plans that signed a voluntary pledge last year to eliminate prior authorizations for some services, provide clearer explanations of decisions and respond to requests in real time.

Dive Insight:

Prior authorizations have been in the spotlight recently as the healthcare industry tries to fix a seemingly broken process. The cost-controlling method used by insurers requires providers to get a preapproval for certain services and prescriptions before administering them to patients. Insurers say prior authorization is a necessary cost control, while providers say it delays needed care. 

Insurers and regulators have made progress with reforming prior authorizations in Medicare, Medicare Advantage, Medicaid and commercial plans. However, self-funded health plans have been left out of many efforts, including the pledge, because they aren’t subject to federal health mandates, being governed instead by the Employee Retirement Income Security Act.

The latest additions to the pledge will expand ongoing efforts at the federal level to improve prior authorization — a priority for both the CMS and DOL, which works directly with companies to offer health benefits to their employees.

Over half of Americans receive coverage through employers with self-funded health plans. Amazon alone covers 2.8 million workers, making its self-funded plan the largest single-employer health plan in the country.

“We've brought insurers, providers, and technology companies to the table to modernize prior authorization, and now employers are helping us take another important step,” CMS Administrator Dr. Mehmet Oz said in a press release. “When the entire healthcare system moves together, we can spend less time on paperwork and more time getting patients the care they need.”

The companies will piggyback on the pledge’s goal of implementing electronic prior authorizations by the start of the year, with the statement calling for the insurance carriers and third-party administrators that oversee self-funded plans to make digital processes available to them immediately.

Health plans have set their own Jan. 1 deadline to switch to a prior authorization process that relies on HL7's Fast Healthcare Interoperability Resources, or FHIR, a data exchange standard for healthcare information. FHIR is open source, meaning it can be universally used by modern health technology systems for real-time data sharing.

This effort aligns with an upcoming CMS requirement that will require FHIR-based application programming interfaces for prior authorizations among Medicare Advantage plans, Medicaid and Children’s Health Insurance Program managed care organizations, and insurers on federally facilitated exchanges. These insurers will need to have APIs that enable providers to instantly see whether a service requires prior approval and what documentation is required by Jan. 1.

Health plans also pledged to have at least 80% of electronic prior authorization requests answered in real time next year, primarily through these FHIR APIs.

Those plans say they’re reduced prior authorizations by 11% so far. Still, some providers say they have yet to feel any improvement from the pledges.