It was Christmas Eve 2005, and the health plan was closing at 3 p.m. By 4 p.m., the nurses, doctors, pharmacists, and support staff who handled utilization management for HIP Health Plan were already on their way home. My usual role at the health insurance company involved creating quality profiles for physicians caring for our roughly 1 million members. But that afternoon, I was covering hospital admissions so colleagues could take the day off. A somewhat frantic operator called to ask if I could take a pharmacy review. I picked up and asked the caller to wait a moment. I raced around the office looking for anyone from pharmacy staff or any of my physician colleagues as I had never performed this type of review and had no access to the pharmacy system. I was alone in the office.

I returned to the call. A pharmacist was seeking prior approval for an expensive medication, one that would allow the patient, currently in the hospital, to go home for Christmas. The pharmacist did not have the clinical details but gave me the doctors’ phone number. I was able to reach the physician who then gave me the information. I looked up the FDA label for the medication. An approval was clearly indicated, and with the medication, the patient would be able to safely go home that day.

Gleefully I called the pharmacist and said, “Yes! Home for Christmas.” There was a pause. Then the pharmacist asked for an authorization number. I explained that I did not have access to the pharmacy system and that we could reconcile payment the next business day. He said he could not release the medication without confirmed payment. I reminded him that I worked for a multibillion-dollar not-for-profit company that has served New Yorkers for decades and we will be open after the holiday. His response was apologetic but firm: The pharmacy computer system would not allow the release of such an expensive medication unless payment was assured. So, I read him the 15 digits on my American Express card. The patient went home. It had taken 90 minutes to get to yes.

The pharmacists had a good laugh the next business day and they called to cancel my credit card charges and provided formal payment authorization.

The complexity of coverage

Over 95 percent of requests for prior approval are approved, but because of the high cost of some medications neither the health plan nor the pharmacy wants to approve and dispense the drug without a formal review and authorization of payment. The health plan is concerned with inappropriate or off-label use and the pharmacist is concerned with nonpayment. A similar dynamic applies to high-cost radiology services and other vendor-supplied care. Neither the pharmacist nor the radiologist has the clinical detail available necessary to support approval. As a result, a complex, three-way exchange of information among the treating physician, the health plan, and the vendor must be carefully coordinated. This multiparty process creates many opportunities for error. As a result, delays are abundant. All too often the consequence is that patients do not go home for Christmas, or worse.

Not all prior-authorization requests are as straightforward as the case described above. In many instances, the requested medication or procedure is experimental, emerging, or supported by evidence that has only recently demonstrated effectiveness for a patient’s specific clinical circumstances. This raises a fundamental question: What constitutes the authoritative source of truth for coverage decisions made by health insurers? The FDA-approved label defines on-label use for medications, yet many widely accepted therapies are prescribed off-label. Some of the most egregious cases of complications of prior authorization come from cancer treatment. Many new and expensive drugs have dramatically improved survival for cancer patients, but the cost engendered even greater scrutiny.

The source of truth

By 2017, my understanding of utilization management had increased, and I was confident that I was consistently making the correct decisions. I had just denied one of those costly specialty medications because treatment for that patient’s cancer was not on the list of covered conditions. The list was provided by the health plan vendor for specialty medications. A call came in from a well-known oncologist. He asked me if I was familiar with NCCN, the National Comprehensive Cancer Network. We talked me through a lookup on their website and found the patient’s specific diagnosis and clinical stage. The guideline had been recently updated to include his patient’s diagnosis. In oncology, the most authoritative reference is the NCCN, a nonprofit alliance of leading academic cancer centers that produces the widely used NCCN Clinical Practice Guidelines in Oncology. The guidelines provided by the vendor were months out of date. Well, that was humbling. I shared my experience with my colleagues so we could try to get a larger fraction of our cases right the first time.

Unfortunately, well-accepted and transparent guidelines are not available for most medical services. The Centers for Medicare & Medicaid Services (CMS) issues national and local coverage and payment policies, but many procedures, drugs, and services fall outside explicit CMS guidance. In these cases, health insurers develop their own clinical policies or license guideline intellectual property from third-party vendors to inform coverage determinations. These guidelines are often converted into structured checklists that are embedded in computerized systems to support efficient review. The patient’s medical record is central to the coverage determination process and provides the clinical context needed to assess medical necessity. Initial reviews are typically performed by nurses and, increasingly, by AI-assisted tools that help identify cases that clearly meet established criteria and can be approved without delay. Requests that cannot be readily approved are escalated to a medical director for physician review.

The burden of denial

Under current federal and state regulations, a medical director must make an independent determination of medical necessity for each case and provide a detailed denial rationale.

In many cases, a peer-to-peer conversation is required, allowing the ordering physician and the health plan’s medical director to discuss the clinical details directly. In my own experience, a large percentage of denials were overturned after the treating physicians provided information that had not been included in the initial submission. These cases make health insurers look bad. I cannot count the number of times I called a physician’s office to request a missing page or a clarifying note that would have supported approval from the outset. My strong preference has always been to get the decision right the first time, rather than deny care and reverse the decision on appeal.

Not every case is appealed so statistics on overturns do not reflect the full reality of prior authorization. When a denial is upheld on appeal, there is often the opportunity for an external review or additional appeal. Not all cases go to external appeal but from the patient’s perspective, delays caused by avoidable denials are deeply distressing. Days or even weeks can pass without knowing whether a recommended treatment will be covered. A Health Affairs article reported that 46 percent of appealed denials are overturned on independent external review. While some reversals may reflect genuine differences in clinical judgment, I suspect that most occur because the original review lacked a complete medical record. The obvious question is whether we can do better.

The prior-authorization process has become one of the most visible and controversial features of health insurance coverage, particularly in the wake of the killing of Brian Thompson, a UnitedHealth executive, one year ago. In response to growing public and governmental scrutiny, major insurers have pledged to reduce the number of services requiring prior authorization, expand near-real-time electronic decision-making, and increase transparency around denials. Several health plans have announced the elimination of entire categories of prior authorization. These initiatives are intended to move prior authorization away from the current flawed processes toward faster, more standardized, and more predictable workflows. Meaningful change will take time.

A radical solution

After 20 years’ experience with utilization management at various for-profit and not-for-profit plans, it is now my opinion that prior approval can be eliminated.

That’s right, eliminated. We, in managed care, have been punishing the class for the behavior of a few. Gold carding of providers with good track records can be effective if supported by strong audits after the treatment is concluded. Fiscal accountability for consistent deviations from well-established guidelines is essential. This will become easier as the current trend toward value-based payment continues. A tiny fraction of physicians commit fraud, but for the most part, they are retained by managed care companies who feel that they must have these doctors to market a robust network to their commercial customers and to avoid costly litigation. If you want to eliminate prior approval, a stronger approach to managing outliers is required.

Let’s stop punishing the class and potentially harming patients by ending prior authorization right now. Let’s make sure that anyone who can go home for Christmas, will.

Edward Anselm is a board-certified internist with a long-standing focus on public health, tobacco control, and preventive care. He earned his medical degree from the Chicago Medical School at Rosalind Franklin University and completed his internal medicine residency at Montefiore Medical Center in New York. Over the past three decades, Dr. Anselm has served in senior leadership roles across clinical, corporate, and managed-care settings, including chief medical officer positions at HIP Health Plan of New York, FidelisCare, and Health Republic Insurance of New York.

Recently retired from his role as medical director at Aetna, Dr. Anselm continues to teach at the Icahn School of Medicine at Mount Sinai as a clinical assistant professor. His current work focuses on strengthening reimbursement pathways for tobacco cessation and preventive services, helping clinicians integrate evidence-based care that improves patient outcomes while supporting practice sustainability. His research has been published in the American Journal of Accountable Care, the American Journal of Preventive Medicine, AJPM Focus, and Health Affairs Forefront, including articles on tobacco control in accountable care, underbilling of cessation services, and the financial and quality benefits of treating tobacco use as a clinical priority.

Dr. Anselm’s educational and policy work is shared through EdwardAnselmMD.com and The Anselm Nicotine Prescription, with professional updates available on LinkedIn.