KEY TAKEAWAYS

• UnitedHealthcare will reduce prior authorization requirements by 30% for some plans starting Oct. 1.

• Americans say prior authorization is their biggest burden in trying to attain healthcare services.

• Federal and state governments are pressuring insurers to improve transparency and speed up approvals.

Some insurers are starting to address a problem that many Americans say impedes their access to healthcare.

UnitedHealthcare said this week that it will reduce its prior authorization requirements by 30% for some of its insurance plans. The reduction by the largest health insurance provider in the country will take effect on Oct. 1 and apply to Medicare Advantage and some commercial plans.

United is not alone. Competitor Humana began reducing its outpatient service prior authorization requirements by a third at the beginning of this year.

For some expensive prescription drugs and services, doctors or providers need prior authorization from the insurer before they can provide the care. Typically, insurance companies consider whether the care is medically necessary, safe, and cost-effective.

Why This Matters

Cutting prior authorization requirements allows patients to get access to healthcare more quickly and easily.

Typically, plans with fewer prior authorization requirements will have higher premiums. However, it is unlikely that these relaxed requirements for UnitedHealthcare and Humana will lead to higher costs for the insured people, said Louise Norris, a health policy analyst at Healthinsurance.org.

“[The insurers] have probably already been approving most of those prior authorization requirements anyway, and it eliminates some red tape,” Norris said.

In a January survey from KFF, a health policy research center, about a third of Americans said prior authorization is a major burden to receiving health care, and another 37% said it was a minor burden. Americans ranked prior authorization as the biggest burden among things like understanding their bill or getting appointments.

“[Prior authorization is] unpopular with patients. It’s unpopular with providers,” Norris said. “There’s pretty strong bipartisan support across lawmakers that agree that it’s burdensome on patients and doctors.”

These changes to prior authorization come at a time when federal and state governments are increasingly pressuring insurers to speed up and be more transparent with their approval processes.

A Centers for Medicare and Medicaid Services rule implemented at the beginning of this year required insurers that manage Medicare Advantage and Medicaid plans to send prior authorizations for standard health services within a week and to state the specific reason for any denials. It also requires insurers to publicly report their prior authorization metrics.

Additionally, Health and Human Services Secretary Robert Kennedy, Jr. and CMS Administrator Dr. Mehmet Oz met with several insurers, including Humana and UnitedHealthcare, to encourage reform in their prior authorization systems last year.

State governments are also taking action to change prior authorizations. For example, in at least 10 states, there are exemptions from the prior authorization process for some health care providers with high approval rates, according to the National Conference of State Legislatures.

Read the original article on Investopedia