UM Transformation, Step 1: What to Insource vs. Delegate

Prior Authorizations (PA), a core function of Utilization Management (UM), was created to protect patients from unnecessary procedures and help manage medical costs. Over time, PA has evolved into a complex, abrasive process with manual workflows, high administrative burden, and fragmented technology systems.

Because of its complexity, many health plans made the decision to outsource aspects of UM, including PAs, to delegated vendors. The ability to scale and simplify in-house operations seemed like a logical choice. However, it became clear that outsourcing PA workflows came with its fair share of drawbacks. Such as inconsistent determinations and reduced transparency. This led to care delays and compliance risks that could impact both reputation and financial performance.

Now, with the landmark Centers for Medicare & Medicaid Services (CMS)-0057 Final Rule raising expectations for PA speed, transparency, and interoperability, health plans are under new pressure to transform UM. The Final Rule isn’t just about compliance. It’s an opportunity to take control of patient care by bringing core PA processes back in-house, building a foundation for better outcomes.

This is the first blog in a three-part series on transforming UM. In this opening blog post, we’ll focus on how to decide what to insource versus delegate, a critical first step in building a modern UM strategy. Future posts will dive into:

• Planning for staffing and resource needs
• Building a compelling business case

Stay tuned as we guide you through each stage of UM transformation.

Evaluating What to Insource vs Delegate

For Directors and VPs of UM, the challenge isn’t choosing between full delegation or complete insourcing; it’s finding the right balance. Delegating all responsibilities to a third party can diminish visibility and control, while assuming every function internally can strain resources and limit agility.

The most effective leaders adopt a hybrid approach: insourcing core functions to maintain oversight and accountability, while outsourcing complex specialties to preserve flexibility without compromising quality.

The first step in this transition is identifying which PA cases should remain in-house and which are better suited for a delegated vendor. To make these decisions with confidence, executives need an objective, actionable framework. That’s where the Volume/Value Framework becomes essential.

Start by categorizing PA services based on volume (how often they occur) and value (clinical complexity and cost). This framework helps you prioritize resources and determine the most effective approach for each category:

Hybrid Model in Action: Oncology Treatments

When it comes to utilization management, oncology is a prime example of why a hybrid approach makes sense. Cases like chemotherapy, radiation therapy, transplant evaluations are low in volume but high in value, requiring subspecialty expertise that most health plans can’t fully support in-house.

Completely delegating these services can erode oversight, while trying to manage them internally can strain resources. The sweet spot? Delegate clinical review to trusted vendors while maintaining control through internal tools for documentation and auditing. This approach ensures compliance, preserves visibility, and keeps care moving without unnecessary delays.

Tool Strategy for Success:

• Vendor platforms for clinical review
• Internal audit workflows for quality assurance
• Clinical questionnaires to streamline documentation
• Gold carding for trusted oncology providers

By applying the Volume/Value Framework, health plans can confidently decide where to insource and where to delegate to create a model that’s both efficient and clinically sound.

How Availity Can Help

Modernizing UM isn’t just about adopting new technology; it’s about choosing a partner with the scale, expertise, and flexibility to support your transformation journey. Health plans across the country, representing over 45 million members, are turning to Availity’s Intelligent Utilization Management solution to do just that.

Join Heidi Nielsen, Senior Director of Intelligent Utilization Management at Availity, and Krithika Srivats, SVP of Clinical Practice at Sagility, for a dynamic discussion on how leading health plans are modernizing UM by bringing core functions back in-house. Learn how hybrid models, powered by intelligent AI and clinical insight, are helping teams gain control, reduce disruption, and deliver better outcomes.

If you’re leading UM strategy, clinical operations, or digital transformation, this webinar will offer practical insights you can act on.

WATCH THE WEBINAR