CMS is proposing a significant expansion of prior authorization reform, extending requirements to prescription drugs with the goal of reducing delays and administrative burden across federal programs.

At the center of the proposal are new decision timeframes, requiring payers to respond within 24 hours for urgent requests and 72 hours for standard requests, establishing a consistent operational expectation across Medicare Advantage, Medicaid, CHIP, and Qualified Health Plans, including small group exchange plans.

The rule also pushes:

• full digital adoption
• expanding electronic prior authorization requirements to drugs
• advancing a shift to FHIR-based standards

This is designed to enable real-time workflows, streamlined clinical documentation, and reduced reliance on legacy transaction systems.

In parallel, CMS is introducing new transparency and accountability measures, requiring public reporting of approval and denial rates, appeal outcomes, decision timelines, and API usage metrics to evaluate system performance and consistency across payers.

Additional provisions include:

• updates to health IT standards
• expanded interoperability requirements
• strengthened regulatory framework through a formal definition of “Failure to Report,”

CMS also seeks stakeholder input on step therapy, cybersecurity, payer API oversight, and broader prior authorization improvements.

If finalized, most provisions would take effect beginning in 2027.

Source: CMS Newsroom