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Medicare & Medicaid Reform Prior Authorization

The long wait could soon be over for some patients.  

Health plan prior authorization is getting an overhaul under a new final rule from the Centers for Medicare and Medicaid Services. Prior authorization is intended to help health plans manage the use of expensive diagnostics and treatments, but it can delay critical care and prioritize cost savings over prompt treatment.  

The agency’s new rule seeks to reduce the burden on patients by changing how prior authorization works for items and services. 

Changes Begin in 2026 

The new rule aims to streamline prior authorization through better policy and use of technology.  

Health plans are required to use a Patient Access Application Programming Interface to share information about prior authorization and to facilitate the approval process. That includes: 

  • Listing the items and services that require prior authorization 
  • Providing documents needed for a prior authorization request 
  • Using the interface to support prior authorization requests and responses 

The Centers for Medicare and Medicaid Services’ rule also requires health plans to respond through the interface with an approval, denial or request for more information. Health plans must respond within 72 hours for an urgent request and within seven days for a standard prior authorization request, according to the final rule. When they deny a request, they must also cite a specific reason. These details can guide providers if they choose to resubmit. 

Under the rule, health plans must also report metrics on their prior authorizations publicly through their website each year. 

Some of the rule’s requirements take effect in January 2026, with others becoming official in January 2027. The rule impacts a variety of federally managed health programs, most notably Medicare Advantage, Medicaid and Medicaid-managed care plans, the Children’s Health Insurance Program fee-for-service programs, employer-sponsored ERISA plans, and Qualified Health Plans offered on federal health insurance exchanges. 

Reducing the Prior Authorization Burden 

Excessive prior authorization requirements have damaged provider-patient relationships and created confusion around continuity of care.  

One-third of providers say they’ve seen patients’ conditions worsen or result in a serious adverse health event while waiting for authorization. And 86% say prior authorizations waste health care resources, including increased office visits and hospital admissions for patients whose treatment is delayed. 

The rule is not a wholesale solution to prior authorization struggles, particularly because it does not apply to prescription drugs. But it’s expected to reduce patient wait times and related suffering. The rule is also poised to save health care providers an estimated $15 billion by limiting the hours of paperwork and phone tag – reducing overhead costs, administrator workload and physician burnout. 

For patients and health care providers beleaguered by prior authorization, the Centers for Medicare and Medicaid Services’ new rule marks an important step in the right direction.  

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