Payers face faster prior authorization approvals under CMS proposal

A proposed rule from the Centers for Medicare and Medicaid Services would require Medicaid and Affordable Care Act plans to speed up prior authorization approvals, the agency said late last week.

The 2026 CMS Interoperability Standards and Prior Authorization for Drugs proposed rule expands on Biden-era requirements for certain federally regulated payers to speed up prior authorization requests using streamlined health data exchange.

Those rules, implemented in 2020 and 2024, focused on non-drug items and services, CMS said. This latest proposal would expand those requirements to drug-related prior authorization requests, as well, and impact the following payers:

• Medicare Advantage organizations.
• State Medicaid and Children's Health Insurance Program (CHIP) fee-for-service programs.
• Medicaid managed care plans.
• CHIP managed care entities.
• Qualified Health Plan (QHP) issuers on Federally-facilitated Exchanges.
• Small group market QHP issuers on the Federally-facilitated Small Business Health Options Program (new under this proposal).

Specifically, CMS has proposed requirements for plans to respond to urgent prior authorization requests within 24 hours. For standard requests, the timeline is 72 hours. If finalized, these changes would take effect on October 1, 2027.

The proposal also includes requirements for plans to publicly disclose claims denials, the outcomes of appeals and timelines for decisions on drug coverage. Plans must also provide specific reasons for denying drug coverage, CMS said. These changes would also take effect in October of 2027 if the proposal is finalized.

As part of the proposed rule, CMS is pushing the use of electronic prior authorization application programming interfaces (APIs). All impacted payers must include drug coverage and documentation requirements in their existing prior authorization APIs.

Additionally, CMS has proposed that all HIPAA covered entities adopt HL7 FHIR standards for prior authorization transactions.

This proposal comes as CMS continues its efforts to curb prior authorization delays and improve patient access to care.

Prior authorizations have long beleaguered patients and providers alike, with clinicians historically reporting that the policy can delay or even deter patient access to healthcare. In 2025, the American Medical Association reported that most physicians (93%) believe prior authorization delays patient care and negatively impacts clinical outcomes (94%).

More recently, payers have pledged to address prior authorization problems.

In June 2025, major payers signed onto an AHIP pledge to improve the prior authorization process, including payer giants such as UnitedHealthcare, Humana, Cigna and CVS Health.

Just last week, those payers said their efforts have paid off. An AHIP/Blue Cross Blue Shield Association report showed that payers participating in the pledge reduced prior authorizations by 11%, resulting in 6.5 million fewer pre-treatment approvals since agreeing to streamline requirements.

With public comments open, payer responses to the CMS proposal are on the horizon. However, major payers' efforts to reduce prior authorization burden could be a positive sign of coordinated industry efforts.

Sara Heath has reported news related to patient engagement and health equity since 2015.