More than 40 health insurance providers announced a joint initiative on Monday and met with Trump administration officials to overhaul and streamline the prior authorization process by reducing administrative burdens on health care providers. However, there remains a big question mark over whether the move will ease pain points for nursing homes. 

The insurers –  represented by advocacy group AHIP and the Blue Cross Blue Shield Association – signed off on the commitments to ease the prior authorization (PA) process. The initiative will apply across major insurance markets, including Commercial, Medicare Advantage, and Medicaid managed care, and will affect 257 million Americans.

Signatories on the pledge included UnitedHealth Group (NYSE: UNH), CVS Health (NYSE: CVS), Elevance Health (NYSE: ELV), and Cigna Group (NYSE: CI).

The reforms will be implemented over the next two years and promise to cut back on unnecessary prior authorization requirements, accelerate response times, standardize electronic submission and review systems, and increase transparency with providers and patients about decisions and denials.

Plans will reduce the number of services requiring PA and honor existing PAs for at least 90 days when patients switch insurers mid-treatment. Insurers will also improve transparency by offering clearer PA decision explanations, including denial reasons and appeal guidance.

As a result, by 2026, insurers will eliminate some prior authorizations, improve communications, and honor existing authorizations from a patient’s previous insurer for 90 days to ensure continuity of care.

The reforms also include the health insurers committing to adopt standardized technology to improve speed and transparency of electronic PA submissions, while also providing real-time responses to most complete requests and aim to process 80% of electronic prior authorizations in real time by 2027.

Most importantly, all clinical denials will continue to be reviewed by qualified medical professionals, reinforcing accountability in care decisions.

This voluntary initiative by health insurers follows increased backlash from providers over growing prior authorization demands and denials, particularly the use of AI in the review process.

Nursing home providers have long argued that these hurdles have delayed treatment, causing a lot of stress on their clinical teams, who have to pivot to dealing with added administrative burdens rather than spending time on the bedside.

And while insurers defend their prior authorization procedure as essential to managing costs and preventing unnecessary care, they counter that many denials stem from incomplete provider submissions.

Impact on SNFs ‘Most Harmful’ 

Despite the announcement, provider groups remain skeptical of any real impact, although, to be sure, there are some positives in the proposal. Leaders at LeadingAge – the largest advocacy group for nonprofit long-term care providers – told Skilled Nursing News that it remained unclear how the initiative will affect nursing homes, which bear the greatest burden from the problems with the prior authorization process.

After all, a 2018 consensus among insurers and medical organizations to improve prior authorization changes was never tangibly implemented. 

Prior authorization is particularly burdensome for long-term care services, especially skilled nursing, and it would be interesting to watch how the suggested reforms build on existing initiatives, according to Nicole Fallon, VP, Integrated Services and Managed Care Policy, LeadingAge. 

“We hope these efforts will extend meaningfully to post-acute care settings – particularly skilled nursing facilities (SNFs) and home health agencies – where delays and denials are most frequent and often most harmful,” she said. “We are encouraged by the insurers’ promises to standardize prior authorization requests, reduce their volume, and ensure faster turnaround times – these are longstanding priorities for post-acute care providers.”

Many of the announced reforms align with existing or upcoming regulations already, she said, noting CMS rules such as that which requires Medicare Advantage (MA) plans to adopt APIs by 2027, and another one that currently mandates a 90-day continuity-of-care period for beneficiaries switching plans that has been in effect since January 2024, Fallon said.

And yet the pain points related to delays and denials for the sector have persisted.

Moreover, so far, the announcements from insurers have not addressed prior authorization practices in these settings, nor have they acknowledged the burden of ongoing concurrent review requirements, Fallon said. She explained that the review process is accompanied by three to five follow-up requests per care episode for maintaining continuity of care as well as super short initial approval windows.

“This is one of the most significant administrative strains for post-acute providers and deserves focused reform,” Fallon noted.

Health insurers must address internal review errors for meaningful change, Fallon said, summing up the conclusion of an OIG report from 2022 that MA plans wrongfully denied requests due to alleged insufficient documentation, even when the necessary information was supplied.

“While we believe the outlined plan to improve prior authorizations sounds promising, we withhold judgment until we see more details in the days/weeks ahead,” Fallon said. “We are hopeful these changes will reduce the burden on post-acute providers and improve timely access to care for vulnerable patients.”

RFK and Oz stand behind the pledged reforms

Still, Health and Human Services (HHS) Secretary Robert F. Kennedy, Jr., and Centers for Medicare and Medicaid Services (CMS) Administrator Dr. Mehmet Oz, who met with health insurance leaders on Monday for a roundtable discussion on the pledged reforms, welcomed their pledge for reform.

“Pitting patients and their doctors against massive companies was not good for anyone. We are actively working with industry to make it easier to get prior authorization for common services such as diagnostic imaging, physical therapy, and outpatient surgery,” said Kennedy.

And CMS will be evaluating progress and driving accountability toward shared goals, Oz said.

“These commitments represent a step in the right direction toward restoring trust, easing burdens on providers, and helping patients receive timely, evidence-based care,” Oz stated.

Companies represented at the roundtable included Aetna, Inc., AHIP, Blue Cross Blue Shield Association, CareFirst BlueCross BlueShield, Centene Corporation, The Cigna Group, Elevance Health, GuideWell, Highmark Health, Humana, Inc., Kaiser Permanente, and UnitedHealthcare.

This pledge to enforce these six reforms, was first announced in a AHIP news release, in which AHIP’s President Mike Tuffin emphasized that outdated, manual systems are harming both providers and patients. Also, Blue Cross Blue Shield Association’s CEO Kim Keck noted that improved technology and interoperability offer real opportunities to enhance care.

Nisha Hammel, Vice President of Reimbursement Policy & Population Health at the American Health Care Association and National Center for Assisted Living (AHCA/NCAL), noted the importance of timely access to care, which is often undermined by the current prior authorization process.

“We appreciate that insurers are recognizing the current challenges with the prior authorization process and are taking steps to meet federal requirements as well as set their own standards for making improvements,” Hammel said. “Our nation’s seniors deserve timely access to post-acute care and the health care benefits they have earned, and we are hopeful that this initiative translates into real, lasting improvements for providers and the residents they serve. We encourage continued momentum to streamline the process but also ensure that medical professionals, seniors, and their families are making these critical care decisions.”