Doctors and hospitals praise new prior authorization rule, but some want more from Congress

Doctors and health systems have derided the administrative headaches in the prior authorization process, so providers are praising new federal regulations designed to streamline the process.

However, some providers say the new regulations also reflect some missed opportunities.

Jesse M. Ehrenfeld, president of the American Medical Association, said the new rule on prior authorization will streamline the process. (Image credit: AMA)

The Centers for Medicare & Medicaid Services released a new final rule Wednesday to speed up the process and have authorizations handled electronically. Beginning in 2026, many payers will have to send decisions within 72 hours for urgent requests and seven calendar days for standard medical services. Payers will also have to cite specific reasons for denials.

CMS says the new policy will improve the prior authorization process and produce an estimated $15 billion in savings for patients, providers and payers over 10 years.

Doctors and hospitals are required to obtain authorization from insurers for a wide variety of services, and payers argue the process reduces costs and prevents unnecessary services. Hospitals and physicians have said the process regularly delays patient care and adds to the administrative headaches and costs for doctors, practices and health systems.

Advocates for healthcare groups generally praised the new federal policy, although some groups say they would like to see additional reforms. Some say even under the new policy, the authorization process isn’t fast enough, and some are hoping Congress will provide additional help.

Premier praised some aspects of the final rule, but the company hoped the CMS would have included quicker timelines for authorization decisions, says Soumi Saha, Premier’s senior vice president of government affairs.

“Premier maintains that CMS should require payers to deliver responses within 72 calendar hours for standard, non-urgent services and within 24 calendar hours for urgent services,” Saha said in a statement.

“Premier is also disappointed by the final rule’s lack of acknowledgement that a pathway to real-time prior authorization exists,” Saha added. “CMS missed a valuable opportunity to develop incentives to move payers and providers closer to real-time processes using innovative technologies.” Premier plans to press Congress for more reforms.

The American Academy of Family Physicians said in a statement that the rule “marks significant progress to address care delays and the administrative burden physicians and their patients face daily.”

However, the academy also said there needs to be additional reform to reduce the number of authorizations that doctors encounter.

“Electronic prior authorization will help cut down on the time physicians spend requesting and appealing coverage authorization from plans, as well as provide patients with more visibility into their care. However, policymakers must also address the overwhelming volume of prior authorizations that physicians must complete,” the AAFP said.

The AAFP is also urging lawmakers in Congress to approve legislation to reduce authorization delays in Medicare Advantage programs.

“While this final rule is a concrete step toward reducing the glaring administrative burden physicians face, we need congressional action to cement this vital progress,” the AAFP said.

The American Hospital Association offered enthusiastic support for the new rule on prior authorization. Rick Pollack, president and CEO of the hospital association, said the process too often leads to delays in treatment and burnout from doctors.

“Hospitals and health systems especially appreciate the agency’s plan to require Medicare Advantage plans to adhere to the rule, create interoperable prior authorization standards to help alleviate significant burdens for patients and providers, and to require more transparency and timeliness from payers on their prior authorization decisions,” Pollack said in a statement.

Jesse Ehrenfeld, president of the American Medical Association, which has faulted the prior authorization process for frustrating doctors and leading to worse outcomes for patients, offered praise for the new policy. He lauded the move to an electronic authorization process in electronic health records, which provides more automation and efficiency for doctors.

“The AMA also appreciates that the rule will significantly enhance transparency around prior authorization by requiring specific denial reasons and public reporting of program metrics as well as requiring that prior authorization information be available to patients to help them become more informed decision makers,” Ehrenfeld said in a statement.

The AMA plans to work with CMS to expand improvements to drug prior authorization, he added.

The Medical Group Management Association praised the new regulations. The MGMA has said prior authorization demands have been worsening, notably in Medicare Advantage programs.

Anders Gilberg, MGMA’s senior vice president of government affairs, said in a statement that prior authorization routinely ranks as “the most burdensome regulatory issue facing medical groups.” The MGMA said the rule will standardize the process.

“The increased transparency provisions — requiring health plans to provide clarity on the reasoning behind care denials and to publicly report aggregated metrics about their prior authorization programs annually — will help shine a light on the egregious abuse of prior authorization by payers under the guise of looking out for patients’ best interests,” Gilberg said in a statement.

Gilbert added that medical groups need to see a reduction in the overall volume of prior authorization requests.