There is nothing more exciting than watching an illusion being performed.  You know logically that it can’t be true, but you find yourself nonetheless suspending disbelief.  I am going to take you behind the scenes of a multibillion-dollar illusion and reveal its dark secrets.

The illusion begins on June 23, 2025, when Health and Human Services Secretary Robert Kennedy held a press conference on Prior Authorizations.  Dr. Mehmet Oz, the administrator for the Centers for Medicare and Medicaid Services (CMS), arrives on the stage, looks at the crowd, takes a deep breath, and the show begins! Before the illusion is revealed, it is necessary to discuss why prior authorizations, as utilized by insurance companies, pose a significant problem.

Prior authorization is an insurance company process in which your physician must obtain approval for a medical service before the insurance company will pay for it.  The justification for this process is to ensure that physicians do not order unnecessary medical services. 

Sen. Ted Kennedy sponsored the Health Maintenance Organization Act of 1973, which was the origin of prior authorizations.  The promise was that if we took medical care decisions away from physicians and transferred them to insurance companies, the cost of healthcare would decrease.  Prior authorizations don’t save money as healthcare spending increased from $100 billion in 1973 to $5 trillion in 2024, a 50-fold increase.  The increased use of prior authorizations mirrored the increased cost, and in  2023, Medicare Advantage had 50 million prior authorizations, resulting in 3.2 million denials.  Eighty-five percent of all Americans have been affected by prior authorizations.

Patients are required to navigate a complex landscape of forms, phone calls, and faxes to obtain approvals.  They have suffered prolonged delays and outright denials of cancer care.  During the press conference, RFK Jr discussed a recent case in which a patient was approved for a heart transplant but not for the heart pump needed to keep him alive until he could receive the transplant.  The surgeons used the pump and were able to perform a heart transplant successfully.  The insurance company then sued the physicians because they did not obtain prior authorization for the pump itself.   Prior authorizations are very stressful for patients as they delay and deny the care the patients deserve. 

The average physician receives 40 prior authorizations per week and spends 15 hours a week on these administrative tasks.  There is a significant shortage of physicians, and we are now wasting a third of their precious time on unnecessary tasks. Physicians are also stressed as their patients can’t receive the care they need in a timely fashion.  This has led to burnout and frustration. Prior authorizations are the number one source of frustration for both physicians and patients.

In light of the inappropriate use of prior authorization by insurance companies and the outcry from patients and physicians alike, the U.S. Department of Health and Human Services (HHS) is under pressure to address this issue.  As we return to the illusion, Dr. Oz takes the stage.  He outlines the issues with prior authorizations and reports that CMS likes to use private solutions when possible. 

He then reports that we have just concluded a roundtable with the CEOs of the largest insurance companies.  The insurance companies participating in the roundtable are represented by the two large health insurance lobbies, AHIP and Blue Cross/Blue Shield (BCBS).  AHIP spent $11,770,000 in lobbying in 2024, and BCBS spent $37,534,499 on lobbying and contributions in the same year.

The insurance company CEOs all make north of $20 million a year in salary. This is Washington, D.C, at its worst. It doesn’t matter if you are the cause of the problem; if you pay enough money, you get a seat at the table. Those victimized by prior authorizations, namely patients and physicians, don’t have a seat at the table. 

Dr. Oz excitedly unveils the grand illusion, the pledge!  Dr. Oz emphatically stated that the pledge is NOT a mandate, it isn’t a bill or rule, it isn’t legislated, and participation is voluntary!   He praises the insurance companies and wants us to believe that this is a novel approach to this problem.

However, this isn’t the first time insurance companies have pledged to reform the problematic prior authorization process.  The major health insurance companies, along with the American Hospital Association, the AMA, and the Medical Group Management Association (MGMA), signed a similar pledge in 2018. 

The 2018 pledge promised to accomplish the following regarding prior authorizations:

• Reduce the number of health care professionals subject to them.

• Constantly review the medical services impacted and eliminate

  Requirements that aren’t warranted.

• Improve communication between health insurers, physicians, and

   Patients.

• Protect the continuity of patient care.

• Accelerate Industry adoption of national electronic standards to

   Assist with prior authorization and provide improved transparency.

This pledge involved the same parties as today’s pledge and contained the same principles. Since the pledge was signed, surveys of physician groups have revealed that the problem has worsened, according to Anders Gilberg, the senior VP of MGMA.

The 2025 pledge is very similar to the 2018 pledge and includes:

• Reduce the volume of medical services subject to prior authorization.

• Enhance transparency and communication around decisions/appeals.

• Honor existing authorizations during insurance transitions to maintain

   Continuity of care.

• Standardize electronic prior authorization using Fast Healthcare

   Interoperability  Resources (FHIR) based interfaces.

• Ensure medical professionals review all clinical denials.

Fool me once, shame on you; fool me twice, shame on me!  Why would anyone think that the insurance companies would honor this pledge when they ignored the one from seven years ago? Patients, physicians, and taxpayers don’t deserve voluntary pledges; they deserve real action!

It is difficult to trust the health insurance companies, as many of them are under investigation for Medicare Fraud violations.  Aetna, Humans, and Elevance were charged with violating the False Claims Act, and UnitedHealth Group is currently undergoing a civil and criminal investigation into Medicare fraud.

We need the elimination of all prior authorizations as they harm patients, waste physicians’ time, and add unnecessary expense and complexity to our healthcare system. 

 The elimination of prior authorization will probably require Congressional action.  However, Dr. Oz has many options at his disposal.  He can ensure that prior authorizations used in Medicare Advantage don’t violate Medicare rules.  These rules state that Medicare Advantage insurance companies can’t use their own rules to deny care, and they must cover any care that is allowed under Medicare rules.

He can aggressively enforce existing rules and regulations, and can also develop new rules to support this process

Dr. Oz revealed in the press conference that the Secretary of Health and Human Services, RFK Jr., raised the question of why prior authorizations were happening at all.  We now have the nephew of the person responsible for the origin or prior authorizations realizing they need to be eliminated!

Isn’t it helpful to have insurance companies review proposed treatment plans to make sure they meet medical standards of care?  This is a commonly touted justification for the use of prior authorization, but the truth is much different.  Insurance companies are increasingly utilizing artificial intelligence algorithms to review prior authorizations and deny care.  NaviHealth is a UnitedHealthcare subsidiary that has developed an algorithm called nH Predict, which is used to manage post-acute care for patients who leave the hospital and transition to a nursing home for continued therapy and care. 

The algorithm was used to screen patients with specific risk factors, and those with the highest risk were fast-tracked for denial.  The risk factors included patients living in nursing homes or having cognitive impairment.  These were also the patients who were less likely to appeal a denial decision.

The same AI program is also used for denying ongoing care.  The use of AI is problematic because the program is proprietary, and there is no external validation available. 

It is far preferable to have your treatment decisions made by you and your physician, rather than an unknown algorithm that prioritizes insurance company profits. 

The grand illusion has been revealed: the actions of the secretary of HHS and the administrator of CMS are the same failed ones from seven years ago. Thus, these recommendations will lead to increased complexity, higher costs, and reduced privacy and security of our medical records.