The US health secretaryRobert F Kennedy Jrand Dr Mehmet Oz announced a voluntary agreement with insurance companies to change prior authorization practices – where private health insurers require patients to ask for permission before they can receive medical treatment.
The majority of Americans get health insurance through a private company, whether through an employer, or a privatization of public health insurance programs, such as Medicare Advantage.
Prior authorization is an insurance company practice that is both common and abhorred. There are whole social mediaaccountsdevoted to egregious examples of it,campaignsfor change built around it, and, in Oz’s words, there is “violence in the streets” over prior authorization – an allusion to thebroad daylight killingof an insurance company CEO.
Oz said repeatedly in a press conference on Monday that 85% of Americans or their loved ones had experienced a delay or denial of care thanks to prior authorization.
“The pledge is not a mandate, this is not a bill or rule – this is an opportunity for industry to show itself,” said Oz, who heads the enormous federal health insurance bureaucracy, the Centers for Medicare and Medicaid (CMS). CMS oversees the health insurance of about 68 million seniors through Medicare and about 71 million low-income and disabled Americans through Medicaid.
“It’s a good start,” said Oz, “and the response has been overwhelming.”
Kennedy called the agreement “momentous” and said it would help make the health system, “work to make our country healthy again”.
The announcement of voluntary measures echoed one made earlier in the year by Kennedy, who announced the administration had an “understanding” with food companies to phase out synthetic dyes. Food companies later told reporters there wasno agreement.
Concurrently, Republicans are working topush a billthrough Congress that is expected to result in at least 16 million Americans losing health insurance in the next decade. The bill would addred tapeto Medicaid and, advocates say, “punish” states that expanded care to the low-income.
With Biblical references and a bullet point chart, Trump administration officials, two Republican members of Congress and even an actor who played a doctor on TV – Eric Dane of Grey’s Anatomy – laid out their hopes for insurers to implement this voluntary agreement that they said covered 275 million Americans.
Should they do so, insurers would work to standardize the prior authorization approval and deliver decisions faster and near real-time (not over the course of, say, weeks). Additionally, insurers would reduce the number of procedures and drugs subject to prior authorization, honor existing prior authorization approvals in the event a patient switches insurers in the course of care and build a “public dashboard” of how the industry is doing which would allow “medical professionals” to review every denial.
Notably, insurance companies made a similar pledge to doctors, hospitals and Americans in 2018, during the first Trump administration. In apress releaseannouncing that agreement, insurers pledged to work with doctors and hospitals to “eliminate” prior authorization for some procedures, “minimize care delays” and “protect continuity of care for patients”.
By 2022, the American Medical Association (AMA), which signed onto that agreement, wasarguing publiclythat insurers failed to live up to their end of the bargain. A 2023 survey by the AMA of 1,000 doctors found 7% of physicians had a prior authorization lead to “a patient’s disability or permanent bodily damage, congenital anomaly or birth defect or death”.
Trump administration officials did acknowledge that the practice could be egregious and warranted change. “A vaginal delivery,” often requires prior authorization, said the Trump administration Medicare director Chris Klomp, “Why is that a question mark in this day and age?”
The insurance industry often argues insurers “target its use” to prevent wasteful testing by doctors. However, prior authorization is known to be incredibly widespread: in 2023, a spokesperson for a lobbying group toldFierceHealthcarethat 93% of beneficiaries were in plans that required prior authorization for nearly a quarter of services.
Beneficiaries of the federal privatization program Medicare Advantage, which allows private health insurers to manage beneficiaries of the public program Medicare (and is widely regarded asmore expensivefor taxpayers), issued about two prior authorization requests for every one of its 32 million beneficiaries in 2023, according to theKaiser Family Foundation.
The practice has even spawned cottage industries: aProPublica investigationfound one company contracted by major insurers sold a product called “the dial” that used an algorithm backed by artificial intelligence to control denial rates.
Unlike the federal government, some states have found the nerve to legislate. In just one example,New Jerseyrequired insurers to turn decisions around faster, required peer-to-peer conversations between doctors about the insurers’ decision and required insurers to share denial rates and reasons – at least some of which one Republican congressman at the dais said he wanted, but was not in the agreement.
“I will say this being a surgeon: I’m a skeptic, the proof is going to be in the pudding,” said Dr Greg Murphy, a Republican from North Carolina, who added that he would be open to regulations, but questioned whether insurers would abide by the agreement: “Are they doing something to placate an audience?”