The American College of Physicians issued a comprehensive position paper calling for substantial reforms to managed care practices, especially because evidence of outcomes of patients who are under this type of care is mixed. The authors cited evidence that prior authorization, narrow clinician networks, and other cost-containment strategies frequently restrict access to medically necessary care while imposing significant administrative burdens on physicians. Recommendations to address these issues included discouraging low-value and overused services in favor of evidence-based care done by qualified clinicians, adopting adequacy standards, providing proper payment for all managed care strategies, and developing centralized credentialing databases as well as a standardized physician credentialing process.
Managed care refers to health care payment or delivery arrangements "where the health plan attempts to control or coordinate use of health services by its enrolled members to control spending and promote improved health," Ryan Crowley, BSJ, and fellow position paper authors wrote, quoting the Congressional Research Service. These arrangements have become the dominant coverage model in the United States: 75% of Medicaid enrollees, 54% of Medicare beneficiaries, and the vast majority of commercially insured individuals are now enrolled in plans using managed care strategies. Only 1% of employees with job-based coverage remain in conventional fee-for-service plans without restricted clinician networks, which is down from 73% in 1988.
While managed care faced significant backlash in the late 1990s for unfairly rationing care, it has since evolved to offer more flexible coverage with broader networks. However, the American College of Physicians (ACP) argues that despite these changes, managed care plans continue to prioritize cost containment over necessary care, making comprehensive reforms increasingly urgent.
Prior Authorization, Quality, and Oversight Concerns
According to a 2024 survey cited in the position paper, 93% of physicians believe prior authorization processes delay access to necessary care, 82% report that prior authorization at least sometimes contributes to treatment abandonment by patients, and 29% said prior authorization led to a serious adverse event for their patient. Medicare Advantage plans received approximately 50 million prior authorization requests in 2023, but denied 6.4% fully or partially. The ACP also found that prior authorization activities consume an average of 13 hours per week of physician and staff time, and 40% of physicians employed staff to be dedicated to the process. One study estimated that physicians spend nearly $27 billion annually on utilization management activities.
Further, in the position paper, Mr. Crowley and colleagues criticized the Medicare Advantage star rating program as "vulnerable to manipulation, failing to reflect marginalized populations' experiences, inflating ratings for mediocre plans so they seem to be high-performing, and failing to improve quality performance." The program distributes bonus payments to high-performing plans but is not budget-neutral; it requires additional federal expenditures beyond the base Medicare Advantage budget to finance those payments.
Given these issues, the ACP emphasized that utilization management should focus exclusively on reducing low-value services with patterns of overutilization—such as procedures with no clear medical indications or those that pose significant risk—rather than restricting evidence-based, routine care. "Prior authorization reviews must be conducted by a physician or clinician with the appropriate license, credentialing, training, skills, and specialty board certification to fulfill the request," the organization stated in its first recommendation.
Network Adequacy Challenges
A 2017 analysis found that on average, just 46% of all physicians in a county were included in Medicare Advantage networks, which raised concerns about patient access to preferred physicians and specialists. In Medicaid managed care, only 25% of contracted primary care clinicians delivered 86% of care. This observation indicated that many listed network physicians may not be actively accepting new patients and undermines managed care organizations' claims of network adequacy.
The ACP called for adoption of qualitative and quantitative network adequacy standards and noted that plans with narrow networks—while offering lower premiums—may expose enrollees to higher out-of-pocket costs, interrupt continuity of care, and exclude specialists. The organization also identified inaccurate clinician directories as a persistent problem that misleads patients about network participation.
Evidence Base and Outcomes
Evidence of managed care's impact on outcomes remains mixed. A 2021 systematic review found that in most comparisons, Medicare Advantage performed better than traditional Medicare on several quality measures, including preventive care visits, hospital admissions, and emergency department visits. However, the researchers acknowledged substantial challenges in comparing the programs, including selection bias, unobserved differences in social determinants of health, and risk adjustment limitations that complicate interpretation.
The Medicaid and CHIP Payment and Access Commission found "no definitive conclusion as to whether [Medicaid] managed care improves or worsens access to or quality of care for beneficiaries."
Physician Contracting and Payment Issues
Mr. Crowley and coauthors also addressed a 2013 incident in which UnitedHealthcare eliminated thousands of physicians from its Medicare Advantage plan networks without explanation or proper recourse to appeal. The ACP opposes such "without cause" terminations and recommends that if a physician's contract is terminated without cause, managed care entities must provide at least 90 days' notice, explain the termination, and offer an opportunity to appeal.
Recognizing the substantial administrative burden managed care imposes on physicians, the organization called for physicians to receive "sufficient payment for administrative tasks associated with prior authorization, processing appeals, and other managed care strategies." The ACP also encourages the development of centralized credentialing databases and a uniform, standardized physician credentialing process to reduce paperwork burdens.
Conclusion
The Health and Public Policy Committee of the American College of Physicians developed the paper through a comprehensive literature review and received input from multiple ACP governance bodies prior to approval by the Board of Regents on November 8, 2025.
Disclosure forms are available with the published article online.
Source: Annals of Internal Medicine
