Amazon, Google, Meta and other employers agreed to reform their prior authorization policies for their self-funded health plans, which provide coverage for millions of Americans.

Prior authorizations have been in the spotlight recently as the healthcare industry tries to fix a seemingly broken process. The cost-controlling method used by insurers requires providers to get a preapproval for certain services and prescriptions before administering them to patients. Insurers say prior authorization is a necessary cost control, while providers say it delays needed care.

Insurers and regulators have made progress with reforming prior authorizations in Medicare, Medicare Advantage, Medicaid and commercial plans. However, self-funded health plans have been left out of many efforts, including the pledge, because they aren’t subject to federal health mandates, being governed instead by the Employee Retirement Income Security Act.

The latest additions to the pledge will expand ongoing efforts at the federal level to improve prior authorization — a priority for both the CMS and DOL, which works directly with companies to offer health benefits to their employees.

Over half of Americans receive coverage through employers with self-funded health plans. Amazon alone covers 2.8 million workers, making its self-funded plan the largest single-employer health plan in the country.

“We've brought insurers, providers, and technology companies to the table to modernize prior authorization, and now employers are helping us take another important step,” CMS Administrator Dr. Mehmet Oz said in a press release.

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