Humana CEO looks to boost automated prior authorization approvals

Humana President and CEO Jim Rechtin says the company needs to ramp up its automated prior authorization approvals and refine its approach to the process as a whole.

Prior authorization, a process insurers use to determine whether they'll cover a particular service or product, has garnered criticism from hospitals, physicians and some policymakers. Concerns about allegedly improper denials have triggered a slew of regulations, bills and lawsuits over the last several years.

Related: More prior authorization rules may be coming: CMS' Brooks-LaSure

The current prior authorization process leaves something to be desired, Rechtin said during a keynote address at a Wednesday event held by lobbying group Better Medicare Alliance.

“On the one hand, it's a really important tool to make sure that we're doing the right care,” Rechtin said. “On the other hand, there's way more friction in that process than there needs to be. There's way more abrasion between the providers and the health insurance company than needs to be there."

Humana approves about 90% of prior authorization requests, Rechtin said. Nearly 70% of requests are approved automatically.

“We need that 68% to be a lot closer to 90%, and we need to do a better job of recognizing when there is almost no need for prior authorization,” Rechtin said.

Humana is not alone in trying to refine the process. For instance, Cigna announced last summer it would eliminate prior authorization requirements for hundreds of procedures in its commercial plans.

CVS Health's Aetna intends to automate about one-third of preapproval requests from providers this year, Chief Medical Officer Dr. Cathy Moffitt said last week. Moffitt said such a change is key to maintaining care quality for patients while streamlining administrative work on the insurance side.

Other insurers, however, have faced controversy over automation tools. Lawsuits allege companies such as UnitedHealth Group and Cigna allegedly used technology to inappropriately deny medical coverage.

Policymakers have shown renewed interest in preapproval-related legislation, such as the Improving Seniors’ Timely Access to Care Act, a sweeping bill that would create electronic prior authorization procedures for Medicare Advantage plans while strengthening oversight of the process.

Humana has endorsed the bill, according to a tracker run by the Regulatory Relief Coalition, a lobbying group focused on prior authorization reform. The Better Medicare Alliance — which represents Aetna, Health Partners Plans, Point32Health, SCAN Health Plan, UnitedHealth Group and UPMC Health Plan — has also endorsed the legislation.

“I think this legislation does a nice job of taking some of the abrasion out of the system without losing the good that comes out of having the tool” of prior authorization, Rechtin said.

The Centers for Medicare and Medicaid Services has finalized two rules that include some of the prior authorization tenets in the Improving Seniors’ Timely Access to Care Act.

States have also created policies related to the issue. Nearly two dozen states have enacted more than 43 bills concerning prior authorization in the last few years, with 18 enacted so far in 2024, according to a National Conference of State Legislatures database.