Doctors are cheering the new federal rule announced Wednesday which will speed up health insurance company decisions on whether to authorize or deny medical care or treatments for millions of patients.
Under the Biden administration’s federal rule unveiled this week, insurers must tell doctors and patients within 72 hours whether to allow a request for urgent medical services, including approval for an operation or a new prescription drug. Insurance companies will have one week to decide non-urgent medical requests.
The Centers for Medicare & Medicaid Services rule seeks to speed up “prior authorizations,” a longstanding health insurance industry practice to vet requests before allowing medical professionals to go forward with billing for certain prescriptions, services and treatments.
Under prior authorization, doctors or hospitals must ask a patient’s health insurance company before performing medical services, including operations or new drugs. Doctors complain that such red tape is burdensome and it’s often used to delay or deny medically necessary medical care for patients. Insurance companies counter that authorizations are a vital tool to prevent unnecessary tests and medical care that inflates medical bills for families.
In a statement, U.S. Department of Health and Human Services Secretary Xavier Becerra said, “Too many Americans are left in limbo, waiting for approval from their insurance company.”
He said the new rule “will shorten these wait times by streamlining and better digitizing the approval process.”
What’s in the prior authorization rule?
The new rule will take effect in 2026 for private Medicare, Medicaid and Affordable Care Act health insurance plans. The rule does not apply to health insurance plans offered through an employer.
The rule, notably, requires that health insurers include a reason for denying a request for care. Such information is used to guide doctors and patients who want to resubmit a request or appeal a denial. The health insurers also must publicly report figures on prior authorizations.
Another provision of the rule requires health insurers to build out computer systems by 2027 to allow doctors to view historical claims and other data.
Doctors applauded the new federal rule as a win for patients and their families.
Steven P. Furr, president of the American Academy of Family Physicians, said the new rule “marks significant progress to address care delays and the administrative burden physicians and their patients face daily.”
The family physicians group cited research that found 97% of doctors reported their patients’ care had been delayed or denied due to prior authorization rulings.
In 2022, a federal watchdog group took aim at the use of prior authorizations by health insurance companies that administer private Medicare plans. The review found the private Medicare plans turned down 13% of authorizations for medical services that government-run Medicare would have allowed.
As prior authorizations have drawn more scrutiny, major health insurance companies such as UnitedHealthcare and Cigna have announced they will curtail the use of these authorizations for some services.
The health insurance industry trade group AHIP initially expressed concerns about the expenses when a draft prior authorization rule was issued in 2022.
In a statement issued Wednesday, AHIP said electronic prior authorizations can ensure patients get necessary care while reducing decision times.
But AHIP urged another branch of the federal government, the Office of the Coordinator for Health Information Technology, to require computer vendors to build software systems that include computerized prior authorizations.
Ken Alltucker is on Twitter at @kalltucker, or can be emailed at alltuck@.com
