UnitedHealthcare announced yesterday that they are cutting down 20% of their current prior authorization starting in Q3 to simplify the healthcare experience of their members and providers.
The news was first reported by the Wall Street Journal. WSJ reported that Cigna has also cut prior authorization requirements for 500 medical services and devices since 2020. Aetna, on the other hand, has focused on automation for prior authorization. HL7 Da Vinci Burden Reduction Project has been at the forefront of prior authorization automation and has released a set of implementation guides.
UHC has not released the list of services included in their 20% reduction but it is highly likely that the low cost services that were already automatically accepted by UHC will be included in this list.
ProPublica published an interesting article last week reporting how Cigna has used automatic denial of claims to save on medical costs. The article reports that in 2014 Cigna started to deny all claims for autonomic nervous system tests that cost a few hundred dollars per test while it previously used to automatically approve all claims for it. Cigna estimated that by turning down more than 17,800 claims a year that it had once covered, they could save roughly $2.4 million a year in medical costs.
Manual review of claims based on their medical necessity can cost more to review than it does to just pay for it and automatic denial or approval can both have negative consequences. Automatic denial of claims might save health plan money because less than 5% of those who have denied coverage would appeal a denial, but it is not legal under many state laws since insurers must consider patient claims using a thorough, fair and objective investigation. Automatic approval can also be very costly for health plans, especially when there is no medical necessity.
Cheist AI is precisely designed to help health plans with their approval process rather than these drastic one size fits all approaches . At Cheista we are helping both payers and providers to expedite the prior authorization review process utilizing new generative language models to highlight medical necessity evidence in clinical notes based on their coverage policies.
UnitedHealthcare announcement mentions that they will also roll out the national Gold Card program for qualified care provider groups in 2024. Gold carding has been a strategy that health plans were recently using for easing the prior authorization burden by lifting the requirement for a period of time for physicians who regularly have their prior authorization approved. Health plans often look for three qualities of a provider to determine eligibility for gold carding: low prior authorization denial rates (<6% for 9 to 12 months), minimal prior authorization requests, and risk-based contract participation. Providers who satisfy these requirements are awarded gold card status for 12 months and can use a special fax sheet for automatic approval under this program.
AHIP survey in 2022 however showed mixed results for gold carding as a method to streamline prior authorization. Although half of respondents found that gold carding reduced provider burden and increased their satisfaction, one third found that the approach was challenging to put into effect due to administrative difficulties. One fifth found that gold carding reduced quality and resulted in higher spending with no increase in quality of care. As a result, some health plans discontinued their gold carding programs mostly due to administration challenges to implement and higher costs without return on investment.
Prior authorization has been a major source of frustration for providers reported by MGMA and AMA. How these new actions by health plans will change the prior authorization process is yet to be seen.