A push for prior authorization reform

In 2022, CMS proposed a new rule aiming to improve the prior authorization process, streamlining requests and sharing healthcare data more readily. The rule was later finalized in January 2024, and most provisions of the rule went into effect in 2026.

Under the rule, Medicare Advantage organizations, state Medicaid and CHIP fee-for-service programs, Medicaid managed care plans, and CHIP managed care entities are required to send prior authorization decisions within 72 hours for expedited requests and seven calendar days for standard requests. These insurers are also required to automate their prior authorization processes through an electronic prior authorization process programming interface by Jan. 1, 2027.

Insurers are also required to justify any denials and publish data on their prior authorization decisions. They are also required to publicly report certain prior authorization metrics, including approval and denial rates, on their websites as of March 31, 2026.

Several healthcare organizations, including the American Hospital Association (AHA), American Medical Association (AMA), and the American Academy of Family Physicians, praised the rule, saying it would help remove barriers to care and reduce clinician burnout.

Recently, CMS Administrator Mehmet Oz announced a new coalition called the Electronic Prior Authorization Acceleration initiative to help healthcare organizations prepare for new requirements under the final rule. So far, 30 healthcare organizations, including insurers, health systems, and EHR companies, have joined the coalition.

"Prior authorization won't be fixed by technology alone. It requires the entire healthcare system to work together to solve real-world challenges," Oz said.  "CMS continues to bring organizations together to do just that, and these early adopters are choosing to lead. This work will help reduce administrative burden, giving clinicians more time to focus on patients and helping people get care faster."

"These measurable commitments – addressing improvements like timeliness, scope, and streamlining – mark a meaningful step forward in our work together to create a better system of health," said Kim Keck, president and CEO of the Blue Cross Blue Shield Association (BCBSA). "This is an important foundation to address bigger problems together, at a time when technology and interoperability can deliver real improvements to patient experience."

Have prior authorization rates improved?

According to a recent report from AHIP and BCBSA, leading health plans have reduced prior authorizations for a variety of different services by 11% since making the reform pledge last year. This reduction is equal to 6.5 million fewer prior authorization requests for patients. Reductions in prior authorizations for Medicare Advantage were even higher at 15%.

Services that no longer require prior authorization include those with clear clinical guidelines and consistent utilization trends for providers. Insurers have also added more consumer-friendly language in their determinations, and if an authorization is denied, have clearly explained what an appeal or next step could be. 

"Health plans have taken important initial steps to support patients and are working toward the shared goal of delivering answers at the point of care whenever possible—a goal that will require both plans and providers to eliminate manual processes and adopt real-time electronic data sharing," said AHIP president and CEO Mike Tuffin.

Some insurers, such as UHC*, are decreasing their prior authorization rates even further. Earlier this month, UHC announced that it plans to eliminate prior authorization requirements for 30% of medical services that previously needed approval. Some of these services include select outpatient surgeries, some diagnostic tests, some outpatient therapies, and some chiropractic care.

"Eliminating these requirements is one more way we are working to make it easier for patients to get the care they need when they need it and ensure doctors can spend more time with their patients," said UHC CEO Tim Noel.

Separately, AMA president Bobby Mukkamala said that the burden of prior authorization on physicians continues to be high even with these improvements. On average, physicians completed 39 prior authorization requests every week.

"Announced reductions in the number of services subject to prior authorization are a positive first step, but physicians and patients must experience a meaningful, real-world decrease in administrative burden and care delays," Mukkamula said.

Overall, Optum Advisory's* Jess Garber and TJ Burdine said that while there has been some good progress made on prior authorization, several challenges remain, and it's not clear whether these changes will have a significant impact on providers and patients.

 "The good news: insurers are entering the arena on prior authorization reform; we are seeing reductions in requirements, faster decisions, and higher overall approval rates, most likely as a result of provider and patient pressure," Garber and Burdine said.

However, "[e]vidence suggests meaningful gaps remain," Garber and Burdine said. "Publicly reported data offers little insight into which services are being denied, or why, ultimately limiting transparency and accountability. While industry pledges and high‑profile moves (like UnitedHealthcare* cutting 30% of requirements) signal momentum, reforms are voluntary, incremental, and uneven, making [us] wonder if these measures will really reduce significant administrative burden for providers and prevent care delays for patients."

*Advisory Board is a subsidiary of UnitedHealth Group, the parent company of UnitedHealthcare and Optum. All Advisory Board research, expert perspectives, and recommendations remain independent.