Prior Authorization Reform Is Here—And It Could Change How Millions Get Care

Ask doctors their No. 1 frustration. Many will immediately say: preliminary authorization. Pre-authorization It is a process that is recommended for patients to receive treatment and is required by insurance companies for many necessary treatments. For physicians and their office staff, this often involves endless cycles of forms, faxes, and phone calls. Now, for the first time in decades, prior authorization reform is taking place.

Recently the Centers for Medicare and Medicaid Services (CMS) recommended Comprehensive new rules extending prior authorization reform to prescription drugs. It builds on the 2024 rule that established new timelines and transparency requirements for prior authorization for medical services.

Together, these rules are the most significant federal intervention in the preclearance process in a generation.

Why is prior authorization required for physician-recommended care?

Prior authorization began as a targeted cost control mechanism for high-cost, low-evidence interventions. Insurers have asked for a review step for expensive, experimental cancer treatments, for example. It has since evolved into a systemwide administrative process that deliberately adds friction to daily medical care.

Here’s how it works in practice. When approval of a treatment requires jumping through prior approval hoops, fewer treatments are performed. Doctors are less likely to order services that they know will trigger a lengthy approval process. When patients or doctors back out, insurers can wait them out: bury the claim in paperwork, ask for more documentation, or schedule an in-person review. Many give up before the treatment is approved. This is because of how the system incentivizes the insurer. Insurers collect fixed premiums regardless of how much care they pay. Every treatment denied or delayed is money saved.

According to a 2024 AMA surveydoctors now complete an average of 39 prior authorization requests per week. This has steadily increased over the past decade, consuming more than 13 hours of doctor and staff time. That roughly translates into a full working day and a half devoted not to patients but to convincing insurance companies that recommended treatments are necessary.

The AMA survey found that 94% of physicians report that prior authorizations delay patient care. More than a quarter said it had led to serious adverse events in their practice, including hospitalization, permanent disability or death. Another 82% report that patients discontinue recommended treatment after encountering consent barriers.

More than a third of doctors employ staff solely to fulfill prior authorization requests. A. to work published in Health Affairs Scholarship found that prior authorization accounts for $35 billion in annual U.S. health care administrative expenditures. A significant portion of this does not directly create clinical value.

2024 CMS Prior Authorization Reform Rule

2024 CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F), effective January 1, 2026. This was an important step in terms of prior authorization reform. Applies to non-drug medical services (for example, surgeries or radiation to treat cancer) covered in Medicare Advantage plans, state Medicaid agencies, managed care plans, Children’s Health Insurance Programs (CHIP), and Affordable Care Act (ACA) marketplace plans. These organizations are now required to respond to expedited prior authorization requests within 72 hours and standard requests within seven calendar days. Previously standard timelines could take two weeks or longer.

It also requires payers to provide a specific reason for each prior authorization denial. It appears to end the era of generic denials that did not provide doctors with an actionable basis for appeal. Additionally, payers are now required to publicly report prior authorization metrics. This includes approval rates, rejection rates, and appeal results. By 2027, they must connect with providers through electronic systems, replacing the fax-era workflows that still define most pre-authorization interactions today.

Here is the New CMS Prior Authorization Reform Proposal for Medicines

The 2024 rule expressly excluded prescription drugs. This eliminated some of the most burdensome authorization requirements. This particularly affects Part B drugs administered in clinical settings, biologic drugs, and specialty drugs central to chronic disease management.

If approved, CMS’s new proposed rule would close this gap. Payers for urgent drug claims will face a 24-hour decision period. For standard requests the interval will be 72 hours. This is a significant compression from current timelines that could extend by days or weeks. The rules will apply to Medicare Advantage, Medicaid, CHIP and ACA marketplace plans. Compliance dates may begin in October 2027.

The proposal also modernizes the technical installation that underpins drug prior authorization. CMS recommends moving from paper and phone-based approvals to real-time electronic systems. This will enable the automated submission of clinical documentation and significantly reduce the back-and-forth that currently characterizes most drug regulatory interactions.

Transparency provisions will also be expanded. Payers will be required to publicly report drug-specific prior authorization metrics. This would create accountability not currently available to pharmaceuticals and allow consumers to evaluate this information before choosing a health plan.

How New AI Processes Are Complicating Prior Authorization Reform

Health insurers have turned to using AI to process authorization requests to make faster decisions and reduce administrative burden. However, what is happening on the field does not seem to achieve these goals.

One AMA research Earlier this year, it was revealed that 61% of doctors believe payers’ use of AI is actually increasing denials. This is further reinforced by reports that some systems are rejecting high volumes of requests without adequate clinical review.

Starting in 2026, CMS requires payers to provide a specific reason for each AI-powered denial and publish aggregated approval data. This is designed to prevent scaled, algorithmic black boxes from overriding clinical decisions. However, whether these guardrails are sufficient will largely depend on sanctions.

The bipartisan Improving Seniors’ Timely Access to Care Act, reintroduced in the current Congress, would codify real-time electronic prior authorization in Medicare Advantage and add more protections. Following Connecticut’s lead, many states prohibit insurers from making coverage decisions solely through AI.

How Could Prior Authorization Reform Happen?

Most of the media coverage of pre-clearance does not include a report on how this all works in practice. This is because the key provisions of the 2024 rule only come into force on January 1, 2026. Although three months have passed since the application, no peer-reviewed results studies have been published. Transparency reporting, which would create the first real data on payers’ performance, would not be available until March 2026.

CMS’s own $15 billion savings projection is also merely a regulatory impact estimate. At the time of rulemaking, no pilot studies were conducted prior to the 2026 compliance dates.

The technology backbone of the rule is also still being created. Electronic pre-authorization systems are not required until January 2027. an industry analysis It found that by 2024, only 35% of health plans are using fully electronic prior authorization systems. This means that a significant portion of the industry may still be running on legacy infrastructure. Unless the underlying systems have changed, faster decision times on paper do not automatically translate into faster decisions in practice.

The gap between authority and reality is something CMS leadership directly acknowledges. “There should be no people working with prior authorization, period,” CMS Medicare Director Chris Klomp told doctors at the AMA’s National Advocacy Conference in February 2026. “We have the technology to perform appropriate clinical care very, very quickly based on your judgment and your decisions, and that’s what we’re striving for.”

What Should Doctors and Health Systems Do Now About Prior Authorization Reform?

The most immediate practical consequence of the 2024 rule currently in effect is the new timeline for non-drug prior authorization objections. An insurance company’s failure to meet 72-hour emergency or 7-day standard deadlines is a compliance issue, not just a delay. Physicians or health systems that encounter persistent violations must document and report them to CMS or their state insurance authority.

Additionally, as data on prior authorization denial and appeal rates at the insurance company level becomes publicly available, physicians and professional associations need to monitor these data closely. This will help shed light on the worst-performing schemes and lay the groundwork for further reform.

On the drug side, the proposed rule will go through a public comment process before being finalized. Medical societies (especially those managing high prior authorization burdens in oncology, rheumatology, and psychiatry) should submit comments advocating for the strongest possible implementation, including shorter timelines and stricter AI safeguards.

The result was prior authorization reform. The proposed drug rule, if finalized and implemented, would extend protections currently in place to the drug arena. Faster decisions, mandatory denial disclosures, and public accountability data represent real change in a broken system where insurers have the ability to create tremendous friction and delays in treatment.

This article was first published on: Forbes.com