Prior authorization is a utilization management tool used by health plans and risk-bearing medical groups to discourage inappropriate care and to ensure that patients receive services covered by their benefit plan and delivered by a contracted provider. Despite the important role that prior authorization plays in the health care system, the widespread consensus is that the processes by which it is carried out warrant significant improvement.

According to the CHCF 2024 Health Policy Survey, four in 10 Californians report that they or a family member has needed to wait for a prior authorization for a procedure or medicine prescribed by a doctor. More than half (55%) report waiting a week or longer. Californians with low incomes were more likely than those with higher incomes to report needing a prior authorization or waiting longer than a week for it.

Authors from the Network for Excellence in Health Innovation solicited extensive input from industry leaders and consumer advocates to identify the five highest-priority problems with prior authorization processes in California:

• The lack of information on prior authorization requirements at the point of care adds to the cost of prior authorization for providers and payers.
• Data about the prior authorization process and its impact are not shared publicly or at actionable levels.
• Repeat prior authorizations and concurrent reviews during a course of treatment interrupt patient care and may expose patients to financial liability.
• Prior authorization requirements are not well understood by patients or providers, resulting in the percep­tion that there are “too many” prior authorizations.
• A perception exists among providers and patients that medical necessity determinations for certain types of complex care are made by health care professionals without the requisite expertise.

After reviewing current California laws and regula­tions, federal and state policy developments, and recent proposals advanced by patient advocates, industry stakeholders, and academic experts, the authors determined that the following four poten­tial approaches share closest alignment with the above priorities:

• Mandate technical requirements to advance adoption of automation.
• Refine public reporting requirements to pro­mote trust and enable dialogue about additional reforms.
• Extend the duration and scope of prior authorization approval for ongoing care with a defined and accepted course of treatment.
• Develop transparent principles for the annual review of prior authorization requirements.