Transparency & Control: Why It’s Time for Health Plans to Insource UM

This month, we’ve explored the cracks in delegation. For years, delegated vendors were seen as a practical way to handle rising medical costs, meet regulatory requirements, and the mitigate the complexity of emerging therapies. But what once was a smart outsourcing strategy is now exposing health plans to new risks: fractured workflows, poor provider experiences, opaque decision-making, and reputational harm that lands squarely on the health plan.

Health plans need a UM model that is Built for Better: better decisions, better provider experiences, better interoperability, and better scale.

It’s time to shift from identifying problems to charting solutions. The future of UM isn’t about managing vendors more tightly—it’s about ownership and control.

When it comes to thinking differently about the UM business model, it’s important to consider different options. The most common models are:

• Insourcing: Managing UM in-house using AI tools and automation. 
• Outsourcing: Contracting with BPO or delegated vendors to perform all UM functions. 
• Hybrid Models: A blend of insourcing and outsourcing with in-house automation, outsourced support, and delegated vendors for complex cases. 

Leading health plans are bringing UM in-house with interoperability, intelligent automation, upskilling staff. It’s time to shift UM from a cost control function to a seamless automated system supporting member care.

The Member in the Middle

Perhaps the most overlooked drawback of delegation is the broken feedback loop between UM and care management. Vendors rarely share proactive data with the plan’s care management teams.

Insourcing changes that. When UM is in-house, approvals can trigger immediate alerts to care management teams, enabling member outreach to ensure the right care at the right time. The impact is not just operational; it’s clinical and human.

Is Insourcing Cost-Effective?

Most delegated vendors charge a per-member, per-month fee, regardless of whether their decisions improve outcomes. This arrangement undermines clinical integrity and disincentivizes innovation.

The health plan shoulders the burden of delays, abrasion, and regulatory risk—but reap none of the gains when processes improve. Vendor contracts that once looked cost-effective are now eating into medical loss ratios.

Insourcing, supported by automation and transparent AI, realigns incentives. Plans control costs directly, ensure resources are deployed efficiently, and see immediate impact from improvements in decision-making.

How Are Regulations Changing the Equation?

The regulatory landscape is also pushing plans toward taking control. CMS-0057 sets aggressive expectations for timeliness, transparency, and API-enabled interoperability.

The AHIP and the Blue Cross Blue Shield Association pledge signed in June 2025 further commits plans to real-time authorization and explainable decisioning.

Plans that continue to rely on opaque processes face reputational risk. Delegated vendors can carry that liability; but it’s the health plan that ends up on the news. Insourcing UM functions now isn’t just compliance—it’s reducing risk.

What Does ‘Built for Better’ UM Look Like?

The pivot to insourcing is a chance to redesign UM around the Built for Better framework:

• Better Decision-Making. Transparent, clinical-first AI replaces vendor black boxes. Every decision is explainable, and audit ready.
• Better Experiences. Providers deal with one portal, and faster, real-time approvals. Members get timely access to care, not confusing denial letters.
• Better Interoperability. FHIR®-based APIs integrate prior authorization submissions and determinations within the EHR workflow.
• Better Scale. Automation handles the 70–80% of routine requests, allowing human clinicians to focus on the 20% that truly need judgment.

Could a Hybrid Model Be the Bridge?

Some health plans may feel that fully insourcing UM across all specialties is unrealistic, particularly given staffing challenges and operational constraints. But a modern hybrid approach puts the health plan back in control:

• Insourced Core Functions. Routine, high-volume requests—like imaging or DME—are handled internally with transparent AI and codified policy.
• Selective Delegation. Specialty areas requiring niche expertise remain delegated, but under a shared infrastructure with common rules, reporting, and audit trails.
• Unified Oversight. Regardless of who executes the work, the health plan owns the policies, the data, and the provider experience.

The future of UM will be defined not by outsourcing or insourcing, but by ownership, integration, and accountability.

By insourcing strategically, health plans can:

• Close the loop between UM and care management.
• Realign financial incentives and eliminate PMPM inefficiencies.
• Meet regulatory requirements with confidence.
• Restore trust with providers and members.

Now is the moment for health plans to pivot from delegation to ownership. With transparent technology and modern infrastructure, UM can finally be Built for Better—for decisions, for experiences, for interoperability, and for scale.

About the Author

Matt Cunningham, Executive Vice President of Product at Availity, brings a unique background with nine years of military service, including command roles during the Iraq invasion and subsequent counterinsurgency operations. Transitioning to healthcare, he has spent over 15 years addressing challenges in prior authorizations and utilization management. With a diverse career, Matt played pivotal roles in scaling a services company from $20M to the largest healthcare benefit services firm, serving in capacities such as Head of Call Center Operations, Director of Product Operations, CIO, and leading integration for mergers and acquisitions. In his latest role, he spearheaded innovation efforts automating prior authorization workflows. Matt also serves as President of the Vantage Point Foundation, dedicated to aiding post-9/11 veterans and their families.