UnitedHealthcare to cut 20% of prior authorizations

UnitedHealthcare (NYSE:UNH) announced Wednesday that it plans to eliminate the use of nearly 20% of current prior authorizations, a decision that will benefit healthcare providers and patients who have long complained about the cumbersome process.

Also known as preauthorization, prior authorizations require health care providers to obtain coverage approvals from health plans before conducting certain non-emergency medical procedures.

The company said the decision would take effect from Q3 2023 and continue through the year for most Commercial, Medicare Advantage, and Medicaid businesses.

UnitedHealthcare (UNH) also announced the launch of a new program under which eligible care provider groups can cut prior authorization requirements from early 2024.

The national Gold Card Program will allow participating provider groups to follow a simple notification process instead of the prior authorization for most procedures.

“Prior authorizations help ensure member safety and lower the total cost of care, but we understand they can be a pain point for providers and members,” chief medical officer of UnitedHealthcare (UNH) Dr. Anne Docimo said.

“We need to continue to make sure the system works better for everyone, and we will continue to evaluate prior authorization codes and look for opportunities to limit or remove them while improving our systems and infrastructure. We hope other health plans will make similar changes.”

According to The Wall Street Journal, which first reported the move, CVS Health’s (CVS) insurance unit Aetna has also said that the company aims to automate and simplify prior authorization. Cigna (CI) was also dialing down on prior authorization, trimming the requirement for about 500 services and devices since 2020.

Read: Seeking Alpha contributor George Fisher argues that UnitedHealthcare (UNH) is a 4 for 1 winner given its diversified business spanning from health insurance to healthcare analytics.