Centers for Medicare and Medicaid Services’s (CMS) Administrator Mehmet Oz has announced more steps by the agency to make prior authorizations by insurers easier to stomach for the rest of the healthcare system. CMS is doing this by adding electronic prior authorization to the entire health tech ecosystem.

“When a healthcare provider orders a test, procedure or medication, the paper-based prior authorization process can drag on for days or even weeks. Clinicians and their staff waste hours filling out paper forms on clipboards, faxing them to insurers, and waiting around for phone calls,” Oz said in a blog post.

“Completing prior authorizations costs health care providers $20-50 per hour and takes an average of 13 hours per week. On average, that’s nearly $34,000 and 700 hours a year per healthcare provider that could otherwise be spent caring for patients.”

Plans in Line

Last year, the U.S. Dept. of Health and Human Services and CMS announced a landmark pledge with major health plans to streamline and improve the prior authorization process across the healthcare industry.

CMS said it is proud to announce the next chapter of that commitment: Adding electronic prior authorization to the Health Tech Ecosystem.

“The initial landmark pledge effort brought the nation’s major health plans to the table. This new initiative brings everyone else. Health systems, hospitals, physician practices, EHR vendors, and digital health developers are now joining payers as a unified coalition aligned around a single mission: making electronic prior authorization work end-to-end, on time, for every patient,” Oz said.

Live in 2027

Electronic prior authorization interfaces from these payers will go live on Jan. 1, 2027, and their use will eventually be incorporated into the Medicare Promoting Interoperability Program for hospitals and the Merit-based Incentive Payment System (MIPS) for clinicians.

These policies will reduce burden on patients, healthcare providers, and payers, saving approximately $15 billion over 10 years, CMS said.

Separately, but as if on cue, the nation’s largest insurer UnitedHealthcare said this week that by the end of 2026, it will remove prior authorization requirements for certain outpatient surgeries, diagnostic tests such as echocardiograms, and some outpatient therapies and chiropractic care.

UnitedHealthcare said prior authorization is required for only 2 percent of its medical services, and 92 percent of submitted requests are approved in less than 24 hours.

Comments or questions? Contact Patrick Connole at pconnole@parkplacelive.com.