Prior authorization reform has reached an important inflection point.
Across the healthcare landscape, health plans, providers, policymakers, and technology solution companies increasingly agree on the need to reduce unnecessary administrative burden while preserving appropriate utilization management. Recent payer initiatives demonstrate that this conversation is beginning to translate into meaningful action.
UnitedHealthcare, for example, recently announced another significant reduction in prior authorization requirements, including changes affecting genetic and laboratory testing. Efforts such as these deserve recognition. They represent an important step toward addressing one of healthcare’s most persistent administrative challenges and demonstrate that health plans can play a meaningful role in simplifying the patient and provider experience.
But they also raise a larger question for the healthcare industry: What should success look like after prior authorization requirements are reduced?
The answer should not simply be fewer authorization transactions.
The next measure of success should be whether we have removed administrative friction from the healthcare reimbursement system or merely changed where that friction occurs.
Prior authorization is a checkpoint, not the underlying issue
Prior authorization itself is only one checkpoint in a much larger reimbursement process.
Behind that checkpoint are legitimate questions that health plans must answer:
- Is the service covered?
- Is it medically necessary?
- Does it meet applicable clinical criteria?
- Is the requested frequency appropriate?
- Is the service consistent with the patient’s plan benefits?
Those questions do not disappear when a prior authorization requirement is eliminated. What changes is when and how they are answered. That distinction deserves more attention as prior authorization reform accelerates.
If the healthcare system removes a pre-service review but does not establish an efficient alternative for communicating the clinical information necessary to support coverage, the unresolved question may simply emerge later, such as during claim adjudication, medical record review, retrospective review, or the appeal process.
That would not mean prior authorization reform has failed, nor should it be interpreted as evidence that payers are intentionally replacing one barrier with another.
Instead, it would mean we have solved only one part of a larger problem.
The industry should start measuring friction, not transactions
This is where I believe the conversation around prior authorization needs to evolve.
Healthcare has traditionally measured administrative processes by transactions: number of authorizations submitted, percentage approved, turnaround time, number of denials, or number of appeals.
Those metrics are useful, but they evaluate individual pieces of the reimbursement lifecycle. What if we instead measured cumulative reimbursement friction?
Consider what happens when a prior authorization requirement is eliminated. The immediate result may be fewer authorization requests. That is clearly positive.
But the more important questions come afterward:
- Did the clean-claim rate improve?
- Did requests for additional documentation decline?
- Did medical necessity denials change?
- Did retrospective reviews increase or decrease?
- Were fewer appeals necessary?
- Did providers receive payment faster?
- Did the payer process fewer manual claim interventions? And, most importantly, did patients experience fewer administrative delays?
Viewed through this lens, prior authorization reduction becomes more than a utilization management initiative. It becomes an opportunity to redesign how clinical and reimbursement information moves between providers and health plans.
Laboratories may be an early indicator
Clinical laboratories provide an especially useful environment for observing this transition.
Laboratory reimbursement is characterized by high transaction volumes, complex medical policies, rapidly evolving technologies, detailed coding requirements, and, in some areas, highly specific coverage criteria.
A small amount of administrative friction on a single claim may seem insignificant. When multiplied across thousands or millions of claims, however, it can create substantial administrative expenses for both laboratories and health plans, as well as disruption for patients.
That makes the inclusion of genetic and laboratory testing in recent prior authorization reductions particularly noteworthy. Laboratories should use these changes as an opportunity to establish a baseline and evaluate what happens next.
If prior authorization volume falls, what happens to first-pass payment rates? What happens to medical necessity denials? Are fewer clinical records exchanged overall, or are documentation requests occurring later in the revenue cycle? Does the time from date of service to final payment improve?
These answers could provide valuable insight into how effectively prior authorization reform is reducing administrative burden.
And that information should not remain solely within the laboratory’s revenue cycle operation. It should become the basis for a new kind of conversation with health plans.
Treat denials as intelligence
Healthcare organizations tend to think about denials transactionally: identify the denial, correct it when possible, appeal it when appropriate, and attempt to prevent it from recurring.
That is necessary, but it overlooks something important. Denials are also data.
At scale, denial patterns can reveal where the reimbursement ecosystem is not functioning as intended. For example:
- If a particular service consistently results in medical necessity denials, perhaps documentation requirements are unclear.
- If claims repeatedly require additional records, perhaps the necessary clinical information is not reaching the payer efficiently.
- If coding-related denials increase after a policy change, providers and payers may be interpreting the policy differently.
And if denial patterns change after a prior authorization requirement is removed, that information can help determine whether administrative burden has truly been eliminated or whether additional parts of the process need refinement.
This is where sophisticated denial analytics can change the relationship between payers and providers.
Instead of approaching the health plan with individual disputed claims, providers can identify patterns, quantify their impact, and engage payers around the underlying process.
The conversation changes from, “Why did you deny this claim?” to, “We are seeing a recurring pattern. What can we learn from it, and how can we prevent unnecessary administrative work for both organizations?”
That is a much more productive discussion.
Payers and providers have a shared incentive
Reimbursement friction is often viewed through the lens of who created the problem. But that framing misses an important point: Unnecessary administrative friction creates costs for both providers and payers.
Every unnecessary authorization, suspended claim, documentation request, corrected claim, provider inquiry, reconsideration, and appeal consumes resources on both sides of the transaction.
Payers have just as much reason as providers to eliminate administrative work that does not improve clinical quality, coverage integrity, or appropriate utilization. That creates an important, shared incentive.
Health plans can continue improving transparency around medical policies, coverage criteria, coding requirements, and documentation expectations. Providers can strengthen documentation, improve coding accuracy, educate ordering clinicians, and use analytics to identify recurring problems before they become systemic.
Technology should increasingly connect those efforts. Electronic exchange of clinical data, real-time benefit information, automated eligibility verification, electronic prior authorization, and more sophisticated claims analytics all offer opportunities to resolve coverage questions earlier and with less manual intervention.
Ultimately, the best reimbursement transaction may be the one that requires the fewest interventions from either organization.
The next generation of payer-provider collaboration
Prior authorization reform should therefore be viewed as a beginning rather than an endpoint.
The recent actions by UnitedHealthcare and other health plans demonstrate that meaningful administrative simplification is possible. The industry should recognize and encourage that progress.
But we should also use this moment to set a higher standard.
Five years from now, success should not be measured by how many prior authorization requirements the healthcare system eliminated. We should be asking whether we reduced the total number of administrative interactions required to get an appropriate healthcare service from clinical decision to final reimbursement.
That requires looking across the entire continuum: eligibility, benefits, coverage, authorization, documentation, coding, claim submission, adjudication, payment, denial, and appeal.
And it requires providers and payers to stop examining each of those processes exclusively in isolation.
The opportunity ahead is not simply to build a healthcare system with fewer prior authorizations.
It is to build one in which payers and providers exchange the right information at the right time, so that appropriate services can move from clinical decision to reimbursement with as little unnecessary intervention as possible.