Robert Hall

On June 23, 2025, America’s Health Insurance Plans (AHIP) announced a voluntary initiative signed by dozens of major insurers—including UnitedHealthcare, Aetna, Cigna, Humana, Kaiser Permanente, and numerous Blues plans—to streamline prior authorization (PA) in the U.S. health system (reuters.com). The initiative aims to ease administrative gridlock for physical therapists, other clinicians, and their patients by implementing six reforms:

  1. Standardized electronic prior-authorization using Fast Healthcare Interoperability Resources Application Program Interfaces (FHIR APIs) by Jan 1, 2027.
  2. Reducing the range of services requiring PA by Jan 1, 2026, “tailored to local markets.”
  3. When patients change insurance plans, prior PAs will remain valid for 90 days starting Jan 1, 2026.
  4. Enhanced transparency with clearer explanations and appeals guidance by Jan 1, 2026.
  5. Real-time approvals (≥80%) for electronic prior authorization (ePA) with full documentation by 2027.
  6. Assurance of clinician review for any denials effective immediately.

Importantly, these changes are voluntary commitments, not legal mandates. Past experience shows that health plans often backslide unless penalties for non-compliance are included in regulation. Physical therapists know strong oversight is needed for any agreement of this nature, and other groups like MGMA and Premier have reminded the public and policymakers that previous payer promises haven’t always led to meaningful results.

For physical therapy practices, the devil will be in the details – and the compliance. In a best-case scenario, PTs could see:

  1. Reductions in PA Volume. If insurers follow through by 2026, many lower-risk PT services could escape PA entirely. But under the agreement, each insurer decides internally which PT procedures are exempt—meaning variation across payers and markets will be here to stay. Without improved transparency, it may be unclear which services no longer need PA.
  2. Faster Decisions for physical therapy authorizations. By 2027, real-time electronic responses could dramatically cut wait times—if insurers build out FHIR-based ePA systems and staff them appropriately.
  3. Continuity of Care Between Plans. Therapists would benefit if PAs transfer when patients switch insurers—reducing treatment interruptions mid-course.
  4. Administrative Clarity. Improved explanations and appeals guidance theoretically empower PT providers to advocate for patients, but only if insurers follow through by January 2026.

Other benefits could include more therapist time because of reduced paperwork, fewer treatment interruptions, and better patient retention. But, as has been mentioned, the agreement does not adequately address the persistent risk of payer non-compliance. Unless CMS or state regulators step in, insurers could slow-walk system updates, limit scope of service reductions, or keep reverting to old procedures with no penalty.

So what should PT practices do to prepare for these changes? First, practices should try to track insurer compliance by regularly identifying which insurers have adopted standardized ePA protocols or updated PA policies. Next, stay informed by watching for CMS enforcement or state-level mandates that could force broader adoption. Third, consider investing in automation by exploring ePA-ready software or FHIR-compliant platforms to streamline submission workflows. Fourth, audit denied claims by monitoring denials closely: if promised transparency and clinician review fails to materialize, flag for escalation or reporting. Finally, be aware that new patient transitions between insurance plans should trigger a verification of PA continuity when patients change mid-course of treatment.

The Bottom Line

Physical therapy practices should treat the agreement as a step in the right direction—but stay vigilant. While AHIP’s PA simplification pledge is promising, it’s fundamentally voluntary and currently unenforced. By combining strategic preparation with active oversight, PT practices might be able to turn AHIP’s voluntary reform into bottom-line gains—fewer delays, less paperwork, and better therapeutic continuity for patients. Advocacy and monitoring will be key and infrastructure investments to capitalize on any real improvements may help as well. But the bottom line remains: if insurers don’t follow through, physical therapists will yet again be required to work with regulators to hold them accountable.