Insurers must approve care more quickly, but providers seek lasting changes

Hospitals and physicians have bemoaned the hassles in getting insurers to approve treatments or procedures, but payers will have to make decisions a little quicker this year.

New federal regulations for prior authorization took effect on Jan. 1. Insurers are now required to send decisions on urgent requests within 72 hours, and within seven calendar days for standard or non-urgent approval requests. The new timelines, which are 50% shorter for urgent and standard requests, were approved in 2024 but are just now taking effect this year.

Health systems and physicians generally detest the prior authorization process, which requires obtaining the approval of insurers before moving ahead with treatment. Providers say the process leads to unnecessary delays in care which hurts patients and causes some to abandon treatment. Payers say prior authorization is necessary to control costs and curb unnecessary procedures.

Erik Wexler, president and CEO of the Providence health system, says he is skeptical that the new timelines are going to improve the prior authorization process substantially.

“I don't think we should be convinced that these efforts are material fixes to the system,” Wexler tells Chief Healthcare Executive. “I think they are micro steps forward, but there needs to be a much bigger reset.”

Providence continues to see delays and hassles in getting insurers to issue timely approvals of authorization requests, he says. The health system also runs into delays in securing approvals from Medicare Advantage plans, and that’s an area where hospitals have seen more headaches with prior authorization.

‘A delay in care’

Under the new federal rules, if insurers deny authorization, they are required to offer specific reasons for the denial. The change is designed to promote more timely appeals. Insurers will also have to share information with the Centers for Medicare and Medicaid Services about their approval and denial rates, along with how long they are taking on those decisions. Payers must report the first set of metrics by March 31.

R. Shawn Martin, CEO of the American Academy of Family Physicians, tells Chief Healthcare Executive® that the newer requirements offer the hope of some progress, particularly in getting more insights on approval rates and times in decisions.

“Transparency is always a really good thing,” Martin says.

“I do give the administration a lot of credit,” he says. “They have centered patients in this process, and really challenge the insurers to reduce the time to treatment for the patients that are in the public health programs. And I do think that's really important. Many of us have experienced this frustration of trying to navigate a prescription, either through mail order at the pharmacy counter. It's frustrating, and I think we need to do better by the patients that we all serve.”

Martin also says he welcomed a recent pledge by UnitedHealth Group to improve the prior authorization process.

While Martin says he’s hopeful to see some relief through the shorter timelines, physicians remain frustrated by delays in getting approvals for necessary treatments.

“I think what really concerns my members most is: it's a delay in care,” Martin says. “A patient is facing a delay in care or treatment that I think our members often refer to as unnecessary.”

Health insurance companies publicly committed last year to ensuring that 80% of all authorizations will be handled in real time by 2027, according to AHIP, the trade group representing health insurance companies. Health insurance companies also vowed to standardize electronic prior authorizations and reduce the volume of treatments that require pre-approval.

Federal health officials, including Health Secretary Robert F. Kennedy Jr. and CMS Administrator Dr. Mehmet Oz, met with health insurance executives last summer and lauded the changes. Oz also said the CMS would evaluate progress.

‘Delays in payments’

While critics welcomed the public commitments, they also said those pledges don’t have the full force of the law. Healthcare groups continue to push the federal government for more changes in the process.

Wexler says he wants Congress to approve a “prompt pay” bill that would require Medicare Advantage to speed up approvals for treatments. Rep. Jodey Arrington, R-Texas, has sponsored the legislation, and a companion bill is in the Senate.

“Payers cannot build their balance sheets and their profitability off of not paying for care that their members received,” Wexler says. “That is unconscionable, and these delays in payments are arbitraging opportunities for the commercial payers, for which we are financing on our end.”

While providers should see somewhat quicker decisions, they say the window is still much too long for urgent requests.

Gary Price, president of the Physicians Foundation, told Chief Healthcare Executive® in a 2024 interview that the 72-hour decision window for urgent requests “does not fit with medical practice.”

“That type of window for an emergency request just doesn't help a physician in an emergency or urgent situation,” Price says. “It doesn't get answers back to them … It's still a barrier to getting good care. And we need to hold the insurance industry to a higher standard on that.”

Some doctors have worried that payers are using artificial intelligence tools to delay or deny authorizations. Three out of five doctors (61%) said they are worried that insurers are going to use AI to increase denials of pre-approvals, according to a 2025 survey by the American Medical Association.

Providers often succeed in getting insurers to overturn denials. Nearly 70% of claim denials in 2023 were overturned, according to an analysis by Premier. Nearly $18 billion was spent unnecessarily on battles over paying claims in 2023, according to the Premier report.

But physicians continue to spend a lot of time on approvals, and patients are waiting too long for treatment, Martin says.

“It really makes you wonder,” he says. “What are we doing? That large of a percentage is being overturned, why are we going through this process in the first place?”