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June 26, 2025 – Health plan members of AHIP and the Blue Cross and Blue Shield Association made news earlier this week when they announced a series of steps that a broad swath of health insurers will take to improve the prior authorization experience. While this is an industry-led initiative, the secretary of the US Department of Health and Human Services (HHS), Robert F. Kennedy Jr., and the administrator of the Centers for Medicare & Medicaid Services (CMS), Mehmet Oz, held a press conference on Monday, June 23, touting this announcement and stating that they met with insurers “covering nearly eight out of 10 Americans” earlier in the day to discuss the details. In an accompanying press statement, HHS and CMS also articulated goals of the commitment, which overarchingly align with those presented in the industry statements. CMS and HHS state that, working collaboratively with insurers, they will have metrics in place to monitor health plans’ adherence to this commitment and reserve “the right to pursue additional regulatory actions if necessary.”
The announcement, along with CMS’s and HHS’s work on this policy area, didn’t come out of the blue, and responds to long-standing criticisms leveled by patients and providers that the prior authorization process is complex, burdensome, and too often results in patients being denied coverage for care they and their doctors believe is necessary to maintain and improve health. Those criticisms led CMS to finalize several regulations in recent years aimed at ensuring plans use prior authorization appropriately and that they develop technology to facilitate electronic prior authorization, which promises to be faster and less burdensome on providers and allow for better tracking of the process. Many of the new rules have yet to take effect, but will be required over the next several years.
Given CMS’s previous actions on prior authorization, one immediate question about this week’s industry action is whether it represents something new, or whether it is an attempt to claim credit for actions that plans are already required to take. To answer that question, I’m bringing in my colleague Lynn Nonnemaker. Together, we’ll review what CMS already mandates and whether the latest commitments from the health plans go above and beyond these pre-established requirements.
In the Advancing Interoperability and Improving Prior Authorization Processes Final Rule published in early 2024, CMS imposed new requirements on plans that operate in the Medicare Advantage, Medicaid, Children’s Health Insurance Program (CHIP), and state Medicaid and CHIP fee-for-service programs, as well as on qualified health plan (QHP) issuers operating on the Affordable Care Act (ACA) marketplace. Notably, CMS does not have authority to regulate all health plans and, therefore, the regulatory requirements only impact certain types of health plans (referred to as “affected” health plans throughout).
The rule finalized new requirements in three key areas: technology to support electronic prior authorization, timelines for prior authorization approvals, and public reporting on prior authorization decisions.
In another rule finalized in 2023, CMS imposed new requirements on Medicare Advantage plans that ensure the plans abide by Medicare coverage rules when they exist. When Medicare coverage criteria are absent, the rule allows plans to develop their own internal coverage criteria, but restricts plans to using clinical evidence in support of those criteria, and mandates that plans publish their criteria on the plan website so providers and patients have ready access. CMS also has taken steps to gather more data from Medicare Advantage plans about prior authorization requests, denials, and appeals.
While these requirements hold the promise to help speed the prior authorization timeline and streamline the process, many observers have continued to call for more to be done. Several bills introduced in Congress this session would put several of the new rules into statute.
Commitment: Health plans that are on board with this plan now say they will move toward a common framework for submissions of “standardized data and submission elements that will support seamless, streamlined processes and faster turn-around times.” This promises to ease the burden on providers who submit prior authorization requests for patients. Currently, every plan may have different requirements for what information must be submitted as part of a request and, in the case of existing electronic prior authorization systems, may have different data requirements.
Implementation date: January 1, 2027
How this compares to regulatory requirements: As stated earlier, regulatory requirements for electronic prior authorization APIs go into effect in 2027. However, under current rules, health plans that are subject to CMS’s regulations can still have different rules for what information must be supplied by providers and how providers must be enter the information into the prior authorization system.
Commitment: Plans commit that they will each reduce the volume of medical services subject to prior authorization and will report data to demonstrate that the industry is meeting this goal. Interestingly, this commitment only applies to plans that participate in fully insured, ACA marketplace, and Medicare Advantage markets. This commitment would not apply to self-insured coverage, perhaps because for self-insured coverage, the employers decide which services are subject to prior authorization. It is also important to note that this commitment appears to apply to medical services only, and does not extend to prior authorization for prescription drugs. However, results of an industry survey released along with the statement show that 96% of prescription claims in commercial and Medicaid sectors are not subject to prior authorization today (for Medicare Advantage the share is 92%), leaving less room for meaningful reductions. While there is no mention of prescription drugs in the commitment, Secretary Kennedy and Administrator Oz did, during the press conference, hint that at least some of these reforms would impact prior authorization processes for medications in addition to medical services. It remains to be seen how exactly those comments from administration officials will square up with the specific actions that the health plans intend to take.
Implementation date: January 1, 2026, with reductions reflecting actions taken since January 2024
How this compares to regulatory requirements: CMS’s current regulations do not mandate affected health plans to reduce the number of services subject to prior authorization. With respect to prescription drugs, the prior authorization requirements included in the Advancing Interoperability and Improving Prior Authorization Processes Final Rule do not apply to prescription drugs and only to medical services.
Commitment: Health plans promise to continue existing prior authorization approvals for 90 days when an individual moves health plans after starting a course of treatment. This would apply to in-network providers at the new plan, and would only apply if the service is a covered benefit under the new plan.
Implementation date: January 1, 2026
How this compares to regulatory requirements: CMS’s current regulations do not include this explicit requirement (although existing requirements in Medicare Part D require that plans offer new enrollees transitioning from another plan the opportunity to refill an existing prescription within the first 90 days in cases where the medication is not otherwise covered under the plan).
Commitment: Plans state that they will ensure that when a prior authorization request is denied, they will clearly explain why and share information about how to appeal. In addition, plans promise to provide staff to explain decisions and appeal options. This commitment doesn’t apply to Medicare Advantage plans because CMS sets rules for plan communications with enrollees, though plans intend to “work with CMS to improve existing mandatory member communications on prior authorization denials and appeals.”
Implementation date: January 1, 2026
How this compares to regulatory requirements: The Advancing Interoperability and Improving Prior Authorization Processes Final Rule requires affected health plans to provide a specific reason for denied prior authorization decisions. When denial information is sent to a provider by any communication method, including existing notices, the content of a denial should be specific to enable a provider to understand why a prior authorization has been denied and what actions must be taken to resubmit or appeal. This commitment could provide this level of information (or even more information) about denials to a broader swath of patients and providers, not just those in health plans that are subject to CMS’s regulations.
Commitment: Plans commit that at least 80% of prior authorization approvals will be delivered in real time when they are submitted electronically by providers, including the required clinical documentation. While the industry statement doesn’t specify exactly what “real-time” means, it does suggest these determinations would be made within minutes. This would be a big improvement over the current landscape, where only about 20% of requests are approved in real time, according to the AHIP survey. One reason why that current percentage is so low is that only about half of all prior authorization requests are submitted electronically today, with many still being sent by mail or fax. While health plans can make this commitment a reality for electronic prior authorization requests, for real benefit to patients, providers will need to step up as well by committing to using electronic prior authorization systems available from payers.
Implementation date: January 1, 2026
How this compares to regulatory Requirements: In the Advancing Interoperability and Improving Prior Authorization Processes Final Rule, CMS instituted specific timelines for certain plans to respond to standard and expedited requests. Real-time approvals would be much quicker than the timelines for those 80% of cases where the policy would apply.
Commitment: The industry statement promised to support “common, transparent submissions for electronic prior authorization” for all lines of business, meaning providers and patients covered by commercial insurance will be able to use the same processes and standards, helping to streamline the larger prior authorization system.
Implementation date: January 1, 2027
How this compares to regulatory requirements: The Advancing Interoperability and Improving Prior Authorization Processes Final Rule imposes new requirements around prior authorization technology for plans operating in the ACA, Medicaid, CHIP, and Medicare Advantage markets. These requirements do not extend to commercial plans.
Commitment: The final industry commitment is something plans say already happens today – a promise to ensure all prior authorization denials are reviewed by a licensed and qualified clinician. The commitment comes amidst concerns about the role of artificial intelligence (AI) in prior authorization reviews, with some critics suggesting plans use AI to deny access to care. Plans have emphasized that AI can play an important role in facilitating faster prior authorization approvals – AI tools will be critical to making the promise of real time approvals a reality. This commitment may help reassure providers and policymakers that plans’ use of AI in the prior authorization process is limited.
Implementation date: Already in effect
How this compares to regulatory requirements: There is no direct regulatory requirement but, as noted above, plans state that this is already occurring today.
Overall, it seems clear that having the industry come to the table on its own has the potential to improve the patient experience for more individuals than CMS and HHS has been able to accomplish through the imposition of requirements on a defined universe of health plans that they are legally authorized to regulate. In the HHS press conference, Administrator Oz and Secretary Kennedy did note on multiple occasions that the health plans “at the table” care for more than 75% of Americans and that additional insurers would likely join this effort before all was said and done. Further, the commitments themselves do in some cases go above and beyond CMS’s regulatory requirements. However, it is important to reiterate that the commitments from these health plans are voluntary. While HHS and CMS have high hopes that insurers will follow through on these commitments, they did not dismiss the possibility of using rulemaking to codify at least some of the commitments (though, as we just stated, CMS’s authority to impose requirements on all health plans is limited.) Similarly, Senator Roger Marshall (R-KS), who attended the press conference, noted that he plans to move forward on congressional action. Senator Marshall introduced a bill earlier this year that would impose additional prior authorization requirements on Medicare Advantage plans.
On a final note, during the press conference, the HHS secretary and CMS administrator stated that, for all this to work, providers also have to play ball by improving their systems and sharing the needed information with health plans electronically. In other words, providers and health plans alike have jobs to do to create a more seamless and efficient prior authorization process for patients. It remains to be seen, however, whether providers and payers can do all this work on their own, or whether Congress and/or HHS will need to intervene at some point down the line.
Until next week, this is Jeffrey (and Lynn) saying, enjoy reading regs with your eggs.
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