Prior authorizations: Insurer pledges, tech plays & exemption pathway

WASHINGTON – In about a one-week span, the Department of Health & Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) proposed three new initiatives that seek to improve and modernize the prior authorization process. Industry stakeholders say the initiatives – while some are geared more toward physicians and are smaller in scale – could have a positive impact on HME providers. 

All in late June: 

• HHS and CMS announced that major health insurers have pledged to: 
  • Standardize electronic prior authorization submissions using Fast Healthcare Interoperability Resources (FHIR)-based APIs.  
  • Reduce the number of services requiring prior authorization by January 1, 2026.  
  • Honor existing authorizations during insurance transitions to ensure continuity of care.  
  • Improve transparency and communication around authorization decisions and appeals.  
  • Expand real-time responses to minimize care delays, with most requests receiving real-time approvals by 2027.  
  • Ensure clinical denials are reviewed by medical professionals.  
• CMS announced the launch of the Wasteful and Inappropriate Service Reduction (WISer) model, a new initiative to expedite the prior authorization process for original Medicare. 
• CMS released a proposed rule that outlines the agency’s plan to exempt providers that achieve a target approval rate of 90% from required prior authorizations. 

‘Pledge not mandate’ 

Dr. Mehmet Oz, HHS secretary, acknowledged the pledge from major health insurers is just that – “a pledge not a mandate.” “There’s nothing really to hold them accountable,” said Melanie Ewald, vice president of payer relations and reimbursement for VGM & Associates. 

But if implemented correctly, two improvements in particular could have a real impact on HME providers, stakeholders say. The first: Honoring existing authorizations during insurance transitions.  

“When I was on the supplier side, that was maddening,” Ewald said. “When a patient changed insurance, you’d find out late in the process and you’d have to go back and get the prior authorization. It would take a month or two. It left you behind the eight ball.” 

Another improvement that could have a real impact: Improving transparency and communication around denials and appeals. “That would be critical,” Ewald said. “That’s part of the reason there is this back and forth for months. There is a lack of transparency, particularly on managed plans that deviate from policy.” 

There are some “mixed emotions,” however, around some improvements, says Laura Williard, senior vice president of payer relations for AAHomecare. Reducing the number of services requiring prior authorizations by Jan. 1, 2026, for example, would not necessarily be welcome by HME providers, especially those who provide complex rehab technology, she says. 

“It gives them some level of assurance,” she said. “We don’t know what eliminating prior authorization would mean after-the-fact. Would they face denials after providing service?” 

WISeR prior authorizations 

Stakeholders said original Medicare is already ahead of the curve when it comes to its prior authorization process for DME – the payer is generally consistent and timely with its responses. So, the prospect of layering technology onto the process to make it even more streamlined is “welcome,” says Ronda Buhrmester, senior director of payer relations and reimbursement for VGM.   

“They’re smart to do it,” she said. “Getting AI involved means looking at documents quicker. What takes hours now takes minutes.” 

But stakeholders caution that the devil is in the details. “The only challenge, from a clinical perspective, is making sure whoever programs the AI is programming it correctly,” Ewald said. “Some things are clear cut, and some things are nuanced and require some clinical discretion.” 

Welcome exemption 

Stakeholders say providers would also welcome the chance to be exempted from required prior authorizations if they’re able to achieve a target approval rate of 90%. But here, too, they caution providers that they “still need to follow the rules” and need to remember their status can be revoked. 

“This is a real positive for the industry, but the education to providers then becomes, you still have to have documentation on file, especially for audit purposes,” Ewald said. 

Overall, stakeholders are supportive of the government’s recent efforts to better use prior authorizations as a tool to prevent waste and to incorporate technology to make the process more efficient for payers and providers.  

“At the same time, we don’t want it to be an overburden to the honest providers who are operating in good faith and who are hopping through all these additional cost hurdles,” said David Chandler, vice president of payer relations for AAHomecare.