The Centers for Medicare and Medicaid Services has published a final rule aimed at improving how prior authorizations are handled by health insurers. The measure primarily limits the time insurers have to approve or deny requests.
In addressing wait times for prior approvals, the CMS is targeting an issue that’s become a problem for some patients whose health can deteriorate while waiting for their doctor’s request for service to be approved.
Besides setting standards governing how long a health insurer has to approve or deny a request, the new rule also requires them to take steps to streamline the prior approval process through technology.
The CMS said when announcing the final rule that it would improve prior authorization processes and reduce the burden on patients, providers and payers, resulting in approximately $15 billion of estimated savings over 10 years.
What the new rule does
Starting in 2026:
- Insurers will be required to approve or deny an urgent prior authorization request for medical items and services within 72 hours of receipt.
- Insurers will have seven calendar days to approve or deny standard requests for medical items and services. For some payers, this new time frame for standard requests cuts current decision wait times in half.
- Carriers must include a specific reason for denying a prior authorization request, which will help facilitate resubmission of the request or an appeal when needed.
- To ensure that insurers will be able to handle the new time frames, the rule also requires them to implement a prior authorization application programming interface (API). The interface must facilitate a more efficient electronic prior authorization process between providers and payers by automating the end-to-end authorization process.
The takeaway
The new rule does not take effect until 2026 to give insurers and other payers more time to put in place API systems that can expedite the process.
The end result should be an improved experience for millions of insured patients nationwide, and that they get their requests handled in a timely fashion.
