Dr. Mehmet Oz, administrator for the Centers for Medicare and Medicaid Services, said during a press conference on Monday that health insurers have "agreed to sheath their swords" and work together on a multipronged effort to overhaul the prior authorization process.
This effort was alluded to earlier in the day, when major payers such as Humana, Elevance and CVS Health announced a commitment to simplifying and reducing the prevalence of prior authorization, with a focus on connecting patients to care more quickly and reducing providers' administrative burdens.
These commitments are being implemented across insurance markets, including for those with commercial coverage, Medicare Advantage and Medicaid managed care consistent with state and federal regulations, and stand to benefit about 257 million Americans, according to AHIP.
On Monday, Oz stressed that the insurance industry's push for reform is not the result of legislation, executive orders or other compulsory governmental mandate, but rather an industry-led effort with guidance from the federal government.
"We like to have private solutions when they're feasible," said Oz.
The conference followed a roundtable discussion among health plan executives, with the CEOs in attendance representing 75% of covered lives in the United States. One of the big topics was inefficient administrative processes, with Oz claiming the U.S. could cut "tens of billions of dollars in administrative waste" through better efforts.
Oz said the industry would be held accountable for its performance.
"Transparency comes with accountability," he said. "We have common data standards that are going to be adopted, and we'll be able to audit whether this is really happening. We're going to trust but verify by having this transparency and accountability."
Participating health plans have signaled that they're implementing common, transparent submissions for electronic prior authorization. This commitment includes the development of standardized data and submission requirements (using FHIR APIs) that will support streamlined processes and faster turnaround times. The goal is to have a new framework up and running by Jan. 1, 2027.
Individual plans will also commit to specific medical prior authorization reductions, as appropriate for each plan's local market, with demonstrable results by Jan. 1, 2026.
Health and Human Services Secretary Robert F. Kennedy Jr. said accountability will be key.
"We have standards this time," said Kennedy. "We have deliverables. We have specificity on those deliverables. We're grateful to the insurance industry for stepping up, and for hospitals for stepping up."
Two industry experts weighed in on the initiative.
Dr. Jeremy Friese, founder and CEO of Humata Health and a 20-year veteran of the Mayo Clinic, said the commitments represent a big step forward.
"For too long, prior authorization has been a source of unnecessary delay and administrative burden across our healthcare system," said Friese. "A broad group of insurers committing to improvements shows that payers recognize the need for reform and are taking a unified step forward. If carried out well, the plan could mean faster decisions, fewer obstacles for providers, and better access for patients."
To make it work, Friese said transparency must be made a priority, which means knowing exactly which services will still require preauthorization, and which policies and criteria will guide those decisions. The process would be too unpredictable without that clarity, he said, and there also needs to be visibility into the results: Which payers are delivering, and and how it's impacting speed, access and outcomes.
"The timeline also prompts some important questions," said Friese. "While aiming for 80% real-time decisions by 2027 sounds promising, many payers are already advancing solutions in 2025. With today's AI and clinical data exchange tools, technology is not the barrier, it's already enabling progress for many. While 2027 may be a realistic goal for some, those further along should be encouraged to move faster and help set the pace for the rest of the industry."
Anders Gilberg, Medical Group Management Association senior vice president, also weighed in, saying that while the industry announcement is encouraging, much of what insurers intend to do has already been mandated by CMS for their Medicare Advantage and Medicaid managed care plans, along with similar adoption dates.
"MGMA joined a consensus statement with provider groups and health plans in 2018 that had similar agreed-upon principles for improving prior authorization, yet year after year we continue to hear from physician practices that it is their number one administrative burden," said Gilberg. "Seven years after the consensus statement and several CMS final rules later, health insurers appear to finally be taking steps toward implementation."
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.