CMS reshapes prior authorization workflows

The Centers for Medicare & Medicaid Services on April 10 proposed new rules to move drug prior authorization out of fax-and-phone workflows and into electronic systems. (cms.gov) The proposal, listed as CMS-0062-P, extends prior-authorization requirements that already apply to many non-drug services so they also cover drugs under medical and pharmacy benefits. (cms.gov 1) (cms.gov 2) CMS said affected insurers would have to answer urgent requests within 24 hours and standard requests within 72 hours, and they would have to disclose denial rates, appeal outcomes, and processing times. (cms.gov) The affected plans include Medicare Advantage organizations, state Medicaid and Children’s Health Insurance Program fee-for-service programs, Medicaid managed care plans, exchange plans on the federally facilitated marketplace, and small-group SHOP exchange plans. (cms.gov) Prior authorization is the insurer’s pre-approval check before a drug or procedure is covered. CMS is trying to make that check run through software links between doctors, pharmacies, and health plans instead of manual back-office work. (cms.gov) (ajmc.com) The agency is also proposing Health Level Seven Fast Healthcare Interoperability Resources standards for prior-authorization transactions under the Health Insurance Portability and Accountability Act, which would push more of the market toward common electronic formats. (cms.gov) CMS framed the rule as the next step after its 2024 interoperability and prior-authorization rule, which focused on non-drug items and services. Public comments on the new proposal are due June 15, 2026. (cms.gov) (ajmc.com) The pressure for changes is coming from both patients and doctors. AJMC cited KFF data showing Medicare Advantage insurers made 52.8 million prior-authorization determinations in 2024 and denied 4.1 million, or 7.7%, of them. (ajmc.com) That same AJMC article said only 11.5% of denials were appealed, but 80.7% of appealed cases were at least partly overturned. The American Medical Association’s 2024 survey found 29% of physicians said prior authorization had led to a serious adverse event for a patient in their care. (ajmc.com) Outside CMS, insurers and vendors are already trying to show progress. AHIP and the Blue Cross Blue Shield Association said on April 8 that plans had eliminated 11% of prior authorizations, equal to 6.5 million fewer requirements, with Medicare Advantage down 15%. (medcitynews.com) Opinion writers in the industry are also pushing a broader use case: Jeremy Friese wrote in MedCity News that newer Medicare pilots such as WISeR are testing whether prior authorization can steer patients to lower-cost, clinically appropriate sites of care, not just block payment. (medcitynews.com) If CMS finalizes the rule, the practical change for hospitals, clinics, and software vendors is simple: payer rules would need to show up earlier in the care workflow, and the documentation for approvals would need to move with the patient electronically. (ajmc.com) (cms.gov)