For too lengthy, utilization administration (UM) has been essentially the most painful supply of abrasion between well being plans and healthcare suppliers.
Care choices are too typically made by third-party distributors with opaque regression algorithms skilled on outdated information. Suppliers are left questioning why medically vital care is delayed—or denied. And sufferers, caught within the center, undergo the implications. What was supposed as a validation of medical necessity has turn out to be a byword for inefficiency, and a root of payer/supplier distrust.
The method is outdated. The mannequin is damaged. And the scientific, reputational, and regulatory prices are rising.
That is the backdrop towards which AHIP, representing the nation’s main well being plans, and the Blue Cross Blue Defend Affiliation made its June 2025 pledge to modernize the authorization course of. The pledge requires lowering the burden of authorizations, enhancing resolution transparency, accelerating response occasions, and defending sufferers from care delays.
However to ship on that pledge, well being plans should do greater than digitize compliance. They need to reclaim UM from a era of delegated, fragmented options, and redesign it for a way forward for scientific integrity, clever automation, and clear collaboration.
The Present Mannequin: Optimized for Value, Not Care
The legacy mannequin for UM is constructed round outsourcing designed round prices financial savings quite than outcomes, affordability, and entry to care. Within the face of rising administrative complexity, many well being plans delegated the authorization course of to third-party distributors who promised scalable, environment friendly decision-making.
Delegated distributors typically function as siloed entities, utilizing disconnected programs and outdated workflows that create delays, information gaps, and miscommunications between suppliers and well being plans. As a result of these distributors handle prior authorizations on behalf of the plan however lack real-time integration with scientific and administrative programs, suppliers often encounter inconsistent choices, unclear standing updates, and lengthy wait occasions. These inefficiencies not solely frustrate clinicians but additionally improve the probability of redundant work, denials, and appeals, including administrative burden for all events concerned.
Furthermore, delegated preparations cut back the well being plan’s visibility and management over key points of the utilization administration course of. When distributors apply proprietary standards or make choices with out full context of the member’s advantages or care historical past, it may result in choices that really feel arbitrary or misaligned with the plan’s values and insurance policies. This lack of transparency contributes to abrasion with suppliers, erodes belief, and complicates efforts to implement reforms like real-time authorizations or value-based care fashions. Finally, outsourcing UM on this method impedes the well being plan’s potential to ship well timed, clinically acceptable, and member-centered care.
Many of those distributors, nonetheless, function as black containers:
- Utilizing regression-based fashions that depend on historic patterns, not the context of the present case, or the scientific wants of the affected person
- Making use of static rule units that may’t adapt to rising therapies or evolving care pointers
- Making choices that lack visibility to both well being plan or supplier, accountability, or scientific nuance
The end result? Choices with no clear scientific rationale. Appeals that clog the system. Burned-out physicians. Annoyed sufferers. And a rising notion, amongst regulators and the general public, that UM is little greater than a bureaucratic barrier to care.
The AHIP Pledge: A Line within the Sand
AHIP’s 2025 pledge lays out 5 important commitments:
- Enhance transparency into UM necessities and choices
- Streamline the method via automation and standardization
- Assist continuity of care and transitions
- Shield sufferers from pointless delays
- Scale back the amount of authorizations required
These objectives are bold, however they’re achievable. What stands in the way in which isn’t know-how, however the entrenched working mannequin: delegated distributors, disconnected programs, and a human mindset centered on containment as an alternative of collaboration.
The one method ahead is for well being plans to personal UM once more, to carry it again in-house or undertake options that provide full transparency, scientific decision-making, and interoperable workflows. Bringing UM again in-house provides well being plans higher management over scientific standards, transparency, and turnaround occasions—serving to to enhance supplier belief and member expertise. It additionally allows tighter integration with inner programs, supporting regulatory compliance, analytics, and steady enchancment in care decision-making.
A Higher Mannequin: Clear, Scientific, and Clever
To rebuild UM from the bottom up, well being plans should commit to 3 core pillars:
Scientific-First Decisioning. Too typically, right now’s UM programs make choices primarily based on what occurred with comparable requests prior to now, quite than what’s clinically acceptable within the current, particularly if generative AI in used.
Tomorrow’s UM should flip that script. It should:
- Ingest structured and unstructured scientific information from the affected person’s report
- Evaluate that information towards written insurance policies of what sorts of care a well being plan will cowl via codified medical coverage
- Floor clear, criteria-aligned suggestions that may be reviewed, understood and trusted by clinicians
Most outpatient authorization requests don’t require debate; they simply want affirmation that the documentation helps medical necessity. A clinical-first mannequin accelerates these approvals and escalates solely what really requires human evaluation.
That is the distinction between regression fashions and precision intelligence.
Accountable Automation. Velocity issues, however pace with out accountability is harmful.
Delegated distributors typically boast about excessive auto-approval charges. However a lot of these approvals are made with simplistic if/then logic masking inconsistencies. Worse, some use black-box AI fashions working on questionable information that well being plans can’t audit, regulators can’t validate, and suppliers can’t belief.
The higher resolution is AI that helps decision-making, not replaces it:
- Routinely approve what clearly meets standards
- Current pended circumstances to reviewers in a structured, decision-tree format
- Present clear scientific rationales, end-to-end traceability, and straightforward to validate audit trails for each resolution
This helps be certain that the primary resolution is the ultimate resolution, and the precise resolution whereas lowering appeals, enhancing turnaround time, and empowering clinicians to work on the prime of their license.
Clear, Interoperable Workflows. Suppliers don’t simply need sooner choices. They need honest, explainable, and environment friendly ones.
Meaning:
- Embedding UM instantly into EHR workflows
- Supporting FHIR-based API change for real-time submission, standing updates, and documentation retrieval
- Giving suppliers visibility into why a request was accepted or denied, and actionable steps as to what’s subsequent.
This stage of transparency is the antidote to distrust. It additionally gives well being plans with a clearer lens on their very own efficiency, enabling higher pattern detection, audit response, and program enchancment.
How Well being Plans Can Get Began
Reclaiming UM is a strategic shift, nevertheless it doesn’t need to be a leap of religion. For well being plans seeking to modernize UM in alignment with the AHIP pledge, listed here are 4 foundational steps to start the journey:
1. Conduct a Transparency Audit. Ask: Can your plan, and your suppliers, see how and why authorization choices are made right now?
- Assessment vendor workflows and establish gaps in traceability.
- Pinpoint the place choices break down or generate pointless appeals.
- Consider how aligned present practices are with evidence-based pointers.
2. Prioritize Scientific Alignment Over Administrative Effectivity to assist be certain that the precise care is accepted shortly—and constantly. Look at how medical necessity standards are utilized throughout your UM program.
- Assess what portion of requests are low-complexity and could possibly be routed for near-instant approval.
- Determine alternatives to ingest scientific information and automate structured resolution assist.
3. Construct for Interoperability from the Begin
- Embrace FHIR® APIs and Da Vinci implementation guides for seamless information change.
- Map current system silos and start consolidating UM, claims, and documentation sources.
- Equip suppliers to submit and handle authorizations inside their native workflows—not simply portals.
4. Set up Governance That Helps Steady Enchancment that is the place technique turns into sturdy and scalable.
- Outline inner possession throughout scientific, compliance, IT, and supplier technique groups.
- Set KPIs that embody each turnaround time and supplier satisfaction metrics primarily based on fast approvals.
- Launch scaled and sequenced rollouts in choose markets or specialties to construct confidence and momentum
The Name to Motion: Redesign, Don’t Simply Modernize
The AHIP pledge gave the business a North Star, however following it requires daring strikes. The query is not whether or not UM ought to change, however who will lead that change.
The well being plans that act now gained’t simply cut back delays and abrasion. They’ll redefine the payer-provider relationship round transparency, accountability, and higher outcomes.
About Matt Cunningham
Matt Cunningham is Govt Vice President of Product at Availity. He introduced his Military operations expertise to the healthcare business and has been centered on fixing the issue of prior authorizations and utilization administration for the previous 15+ years.
