While not a new dynamic, health plan-provider abrasion can be amplified in today’s healthcare landscape. For example, 89% of providers rated prior authorization requirements as very or extremely burdensome in 2023.¹ A New England Journal of Medicine report found that the percentage of providers who rate their alignment with health plans as not very or not at all aligned increased from 77% in 2018 to 82% in 2022.² And more contentious contract negotiations seem to have become the norm, with publicly reported disputes up 69% from 2022 to 2023.³

While specific abrasions, like prior authorization requirements or denials, have increased, they take place amidst a more challenging environment for providers and plans that amplifies their overall impact. Inflationary pressures continue to significantly impact providers’ cost structure, contributing to strained contracting cycles with plans. Coming out of the pandemic, providers feel burdened with an older, sicker, and higher-cost patient population. Health plans also undergo pressure as healthcare use returns to or exceeds pre-pandemic levels — and may in turn increase utilization management (UM) strategies that add to overwhelmed providers' already full plates. Plans and providers experience tension over a shifting payment mix and growth in Medicare Advantage (MA). Providers report increased administrative burden and UM associated with MA plans, while health plan MA growth goals face regulatory and utilization headwinds.