The secret behind prior auth reductions

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Last week, I had my septic tank routinely serviced. The company made it clear: no service would be provided until they received payment.

I met them in my driveway with a check.

I get it. Chasing down payments after the work is done is costly. I could delay, dispute, or even ignore the bill. I could request documentation of every little thing they did. They’d have to spend time and money sending reminders, possibly arguing over whether the job was done “as expected,” maybe even taking me to court. Those costs would eventually be passed back to customers. By collecting payment up front, they avoid all that, keep prices lower, and can actually plan their business around predictable revenue.

…you picking up what I’m putting down?

Speaking of poop, let’s talk about health insurance companies.

On July 22, 2025, Humana announced it was “accelerating efforts to eliminate prior authorization requirements to ensure a faster, more seamless process.”

Call me cynical, but announcements like this rarely mean what they seem. The press release emphasized that they will “reduce the administrative burden for physicians associated with prior authorizations,” and approving care requests faster.

Why my emphasis on “physician burden?” You’ll see later.

Their entire press release is focused on reducing prior authorizations but says nothing about payment for those services.

The devil is in the details…

But let’s take a step back.

Why the focus on Prior Authorizations?

While most of the revenue cycle is hidden, prior authorizations have become a household term. They are one of the few revenue cycle hurdles that both patients and physicians actually see.

• Patients experience delays in care or canceled procedures.

• Physicians burn hours on peer-to-peer calls or hire staff just to manage paperwork, and they’re using social media to amplify their voices (see Dr. Elisabeth Potter on X)

• After the UHC CEO assassination, the frustration fueled viral social media posts like, “I’m sorry, prior authorization is required before thoughts and prayers” (where “delay,” “deny,” and “depose,” were written on the bullet casings).

Insurers know this is a massive PR problem.

The Shift to the Back End

Here’s what’s already happening and I suspect will increase with the reduction of prior auths: instead of denying care up front with prior auths, insurers are moving denials to the back end (learn what that means in my newsletter issue on the revenue cycle.)

They’ve been laying the groundwork for years with ever-changing medical policies. These aren’t labeled as prior authorizations requirements, but they function the same way. Services are performed, but payment is withheld unless documentation or patient criteria exactly match those policies.

And because policies vary across each and every payer, and can (and do) change multiple times a year, they are nearly impossible to track, even for large health systems. But that’s the strategy - deny via obscurity and complexity.

This is nothing new. Even CMS participates in this practice via RACs (Recovery Audit Contractors) with a look-back period of 3 years, which is longer than most private payer contracts.

Even worse, some payers have been signaling this shift for some time, stating in denials that prior authorization is “not a guarantee of payment.”

Why It’s a Brilliant PR Move

From the insurer’s perspective, it’s win-win:

• Patients get their care without delay.

• Physicians don’t have to do peer to peers or deal with paperwork.

• Furthermore, physicians will likely still get paid, so they’ll stop complaining, especially online.

  (We often see payers will pay the professional fee to physicians, but deny the facility payment. I suspect that will continue with this move)

• The denials fall disproportionately on facilities (health systems, surgical centers, imaging centers, etc.), which bear the larger costs.

The facilities are then forced to go back to physicians after the fact for additional documentation, and request documentation requirements for future cases. Heck, health systems may even have to have their own “prior authorization” processes in place. Suddenly, the health system looks like the bad guy, not the payer

I spoke to Eric Fontana, an industry researcher at Union Healthcare Insight, who confirmed that they’re seeing this broader strategy shift as well.

What This Means for Providers

This is not really a reduction of barriers. It’s a relocation - shifting to a less visible target.

So while headlines promise “fewer prior authorizations,” what’s more likely coming is:

• More retrospective denials of payment.

• More obscure requirements.

• More pressure on hospitals, surgical centers, etc. to absorb costs, chase down clinicians for paperwork, or put their own “checks and balances” policies in place (aka more administrative costs).

The Bottom Line

Payers are trading one form of friction for another. It’s a clever PR strategy, but the administrative burden and cost-shifting will continue to grow.
Patients may stop complaining about delays.
Physicians may feel relief.
But the facilities where care is actually provided will carry the brunt of denials and fight the battles quietly, behind the scenes.

And health systems, I hope you’re prepared.

Share your thoughts in the comments, or on Linkedin!

That’s all for now.
Cheers,
Robert

Thanks to Laura Samson, RN BSN CCDS for editing this newsletter!

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