Advancing Prior Authorization: The Evolution in CMS Regulation

 The Centers for Medicare & Medicaid Services (CMS) have embarked on a decisive move by enforcing a standard for prior authorization. In a conversation with the Senior Director of Utilization Management, we discussed the potential implementation and impact of this proposed mandate, slated for enactment in January 2026

The Predicament of Prior Authorization

The process of obtaining prior authorization, also referred to as pre-approval, instills apprehension in both patients and providers. According to a 2022 survey conducted by the American Medical Association, 88% of providers expressed that the demands of prior authorization were notably high. The Medical Group Management Association (MGMA) further underscored this sentiment by ranking prior authorization as the most significant regulatory challenge for doctors.

In the traditional fee-for-service payment model, prior authorization by payers is undeniably vital. Without it, there would be a surge in over-treatment, leading to discomfort for patients and financial strain on payers. This practice is not exclusive to the U.S., as prior authorization is prevalent in numerous nationalized health systems.

Although the fee-for-value model theoretically negates the necessity for prior authorization, achieving this ideal remains a distant prospect. In 2022, the Council for Affordable Quality Healthcare reported that over 66 million prior authorization requests were manually submitted via phone or fax. Such manual submissions often occupy over 20 minutes of staff time at medical practices. Moreover, in certain states, the decision-making process by insurance companies can take up to 14 days.

The appeals process for denials consumes even more time, with clinicians potentially spending an hour or more conversing with the payer’s representative. The Senior Director of Utilization Management highlighted the myriad obstacles faced by doctors in submitting authorization requests. Due to each health plan’s distinct payment rules and medical policies, the current process lacks automated checks present in other systems. These checks would ensure that information submitted by practices aligns with plan requirements for pre-approval evaluations. Presently, physicians shoulder the responsibility of comprehending the requirements for utilization review set forth by each health plan.

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