Utilization Management Reform
Utilization management (UM) covers a broad set of insurance practices that are used to limit healthcare costs and determine whether services, treatments, or medications will be covered.
Common utilization management tools include:
- Prior Authorization (PA): Requires approval from the insurer before a medication, test, procedure, or treatment will be covered.
- Step Therapy (“Fail First”): Requires patients to try insurer-preferred treatments before accessing the treatment prescribed by their clinician.
- Quantity Limits: Restricts the amount of medication or number of treatments covered during a specific period.
- Formulary Restrictions: Limits coverage to medications included on an insurer’s preferred drug list.
- Medical Necessity Reviews: Requires documentation demonstrating that a service, procedure, or treatment meets the insurer’s criteria for coverage.
- Site-of-Care Restrictions: Requires services such as infusions or imaging to be performed in designated locations.
- Concurrent Review: Ongoing review of care during hospitalization or treatment to determine whether continued services will be covered.
- Retrospective Review: Evaluation of services after they have been provided to determine whether they will be reimbursed.
While intended to save costs, unfortunately many of these utilization management requirements place a significant administrative burden on physicians and healthcare teams. Prior authorizations, step therapy appeals, and other coverage reviews require clinicians and staff to spend substantial time completing paperwork, submitting documentation, and communicating with insurers rather than caring for patients. These processes can delay treatment, increase practice costs, and contribute to professional burnout — and shift valuable healthcare resources away from direct patient services.
In 2025, AMWA held a roundtable on utilization management during the AMWA Interim Meeting where AMWA leaders shared first-hand experiences of the impact of utilization management. One outcome of the roundtable was AMWA’s participation in the UM Practitioner Project (along with the American Association of Nurse Practitioners (AANP), National Association of Hispanic Nurses (NAHN), and National Association of Black Nurses (NABN). With funding from PhRMA, a survey was developed to gather additional physician perspectives, and the results were presented at the AMWA 2026 Annual Meeting. The findings reinforced concerns that prior authorization, step therapy, and other utilization management requirements contribute to delays in patient care, increase administrative workload, diverting valuable clinical time away from direct patient care.
AMWA has advocated for step therapy reform through support of the Safe Step Act (H.R. 5509 / S. 2903), participating in coalition sign-on letters and engaging lawmakers during Capitol Hill visits. The legislation seeks to establish a clear and timely exceptions process, helping ensure that patients can access medically appropriate treatments without unnecessary delays.
RESOURCES:
Step Therapy Legislation by State (StepTherapy.com)
ACP Position Paper on Mitigating the Impact of Step Therapy (ACP)