Prior authorization (PA) reform is a central topic of the healthcare affordability conversation. Policymakers have been increasingly focused on narrowing when PA is used, reducing delays for patients and replacing fax- and phone-based authorizations with standardized electronic processes. Most of these changes are being phased in, with many policies taking effect in 2026 and full electronic PA slated to take effect in 2027. Whether these changes will be sufficient to address current PA delays remains to be seen.   

What has already been done? 

In 2024, CMS finalized major PA changes for Medicare Advantage, Medicaid, CHIP and Qualified Health Plans on the federally facilitated exchanges. Beginning in 2026, payers must provide a specific reason when denying a PA request and must issue decisions within 72 hours for expedited requests and within seven calendar days for standard requests. Beginning in 2027, payers must also implement PA Application Programming Interfaces (APIs) that identify whether a service requires authorization, what documentation is needed and whether the request is approved, denied or requires more information. CMS says that electronic PA use will eventually be incorporated into the Medicare Promoting Interoperability Program for hospitals and the Merit-based Incentive Payment System (MIPS) for clinicians, although no specific timeline has been shared.  

CMS is now proposing to apply these electronic prior authorization requirements to drugs, which were excluded from the 2024 final rule. The proposed rule would require payers to share information such as authorization status, approval or denial date, expiration date, approved drug and dosage, denial reason and related clinical documentation through relevant APIs. CMS is also proposing a centralized approach for payer API endpoint reporting, which the Agency says could help providers avoid having to locate payer interfaces one by one. 

This month, CMS also announced a new “Electronic Prior Authorization Acceleration initiative” to drive solutions ahead of the 2027 requirements. This pledge requires entities to “advance electronic prior authorization beyond minimum compliance requirements by implementing interoperable, end-to-end workflows across medical prior authorization processes.” 

In 2025, the Administration announced a voluntary pledge for health insurers to streamline PA. However, these pledges are based on what payers report to be doing and don’t constitute national policy. The pledge applies to plans covering nearly eight in 10 Americans and includes commitments to standardize electronic PA using FHIR-based APIs, reduce the volume of services subject to PA, honor existing authorizations during insurance transitions, improve communication around decisions and appeals, expand real-time responses, and ensure medical necessity denials are reviewed by a licensed clinician. CMS described the pledge as a way for payers to collaborate with the government without the need for the government to force fixes. Since then, CMS says that payers have already begun delivering results.  

At the same time, CMS is not moving toward less PA in every context. The Agency’s WISeR Model, which began in 2026 in selected states, tests PA and pre-payment review for certain services in traditional Medicare that CMS identifies as vulnerable to fraud, waste or inappropriate use. CMS says the model uses enhanced technologies, including AI and machine learning combined with clinician review, to ensure selected services meet Medicare coverage criteria. The model highlights a tension in current federal policy: CMS is seeking to reduce unnecessary administrative burden and speed appropriate care, while also using PA-like tools where it believes utilization oversight is needed. 

What’s Congress doing? 

Congress is exploring more direct statutory limits, particularly in Medicare Advantage. Last month, Sens. Roger Marshall (R-KS) and Sheldon Whitehouse (D-RI) introduced the Medicare Advantage Improvement Act, bipartisan legislation that would codify the existing CMS requirements while also adopting more protections. The bill would prohibit plans from requiring new authorizations mid-treatment once care is approved and bar retroactive denials, except in cases of fraud or error. It would also prohibit automated denial algorithms, require public reporting of PA data and prevent MA plans from applying stricter medical necessity standards than original Medicare. AHPA strongly supports this legislation.  

Concerns with prior authorization delays have also been raised in several recent Congressional hearings, with lawmakers acknowledging that it remains a pressing issue.  

What’s Next? 

The next several years will likely be defined by implementation of CMS’ regulatory requirements. The open question is whether these reforms will meaningfully reduce treatment delays and administrative burden, particularly when there are no penalties yet for non-compliance.