- CMS finalized a rule to reform the prior authorization process for Medicare Advantage, CHIP, and other federal coverage programs.
- The reforms are designed to reduce delays in patient care, increase transparency, and create a streamlined process for providers.
Last week, the Centers for Medicare & Medicaid Services (CMS) issued a final rule aimed at reforming the prior authorization (PA) process. The U.S. Department of Health and Human Services (HHS) estimates that these changes will result in approximately $15 billion in savings for physician practices over the next decade.
These reforms address the concerns raised to the Administration by STS and other stakeholders regarding unnecessary and avoidable patient harm due to prior authorization protocols. In an American Medical Association (AMA) survey, 93% of physicians reported care delays or disruptions associated with PA and that 34% of physicians report that PA has led to a serious adverse event (e.g., hospitalization, permanent impairment, or even death) for a patient in their care.
Who does this impact?
The final rule specifically addresses prior authorization for medical services in various government-regulated health plans, including Medicare Advantage, State Medicaid, Children’s Health Insurance Program (CHIP) fee-for-service programs, Medicaid managed care plans, CHIP managed care entities, and qualified health plan issuers on federally facilitated exchanges.
What does it do?
Starting in 2026, affected payers must make PA decisions within 72 hours for urgent requests and within a week (seven calendar days) for non-urgent requests. Enforcement mechanisms, including sanctions and penalties, will be applied.
The final rule aims to improve transparency by mandating specific denial reasons, public reporting of program metrics, and providing PA information to patients. Impacted payers must provide a specific reason for denied PA decisions, regardless of the method used to send the prior authorization request. CMS also will require impacted payers to publicly report certain prior authorization metrics annually on their website.
Payers will be required to develop and implement PA web portals to make data available for patients, providers, and other payers. These portals will be used to add information about PA requests, facilitate care coordination between providers, and support care continuity between payers.
More information on the final rule can be found on the CMS website.