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Biden administration finalizes prior authorization changes

Rule would require Medicare Advantage organizations, Medicaid and other government-sponsored health programs to include specific reasons for denying requests

Health and Human Services Secretary Xavier Becerra says the rule would help ensure that patients could receive timely access to care.
Health and Human Services Secretary Xavier Becerra says the rule would help ensure that patients could receive timely access to care. (Tom Williams/CQ Roll Call file photo)

The Biden administration on Wednesday finalized a rule aimed at streamlining health plans’ use of prior authorization, fulfilling a priority of physician groups and many members of Congress. 

The rule would require Medicare Advantage organizations, Medicaid and other government-sponsored health programs to respond to prior authorization requests faster and include specific reasons for denying requests.

“When a doctor says a patient needs a procedure, it is essential that it happens in a timely manner,” Health and Human Services Secretary Xavier Becerra said in a statement. “Too many Americans are left in limbo, waiting for approval from their insurance company.”

Specifically, beginning in 2026, the rule would require that Medicare Advantage plans, Medicaid and Children’s Health Insurance Program managed care and fee-for-service plans respond to non-urgent requests no later than seven calendar days.

Those plans, as well as plans on the federally facilitated exchanges, would have 72 hours to respond to urgent requests. 

The rule allows for extensions in some circumstances. The timelines are the same ones proposed by the Biden administration in 2022. 

Currently, Medicare Advantage plans have up to two weeks to respond to non-urgent requests. The 72-hour response timeline for urgent requests remains unchanged.

Provider groups had pushed for a 24-hour timeline for urgent requests and 72 hours for standard requests. Still, they seemed happy with the final rule.

Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association, said the final rule “is an important step forward” toward his organization’s goal of “reducing the overall volume of prior authorization requests.”

“Only then will medical groups find meaningful reprieve from these onerous, ill-intentioned administrative requirements that dangerously impede patient care,” he said in a statement.

The Centers for Medicare and Medicaid Services estimated the rule would save $15 billion over 10 years.

The rule would also require payers, by 2027, to allow patients to access health information including claims, clinical data, laboratory results and information about prior authorization.

Plans would also be required to create prior authorization application programming interfaces that would allow providers to determine whether prior authorizations are required for a certain item or service and what kind of documentation is needed.

Providers have complained that it is sometimes unclear when a service will require prior authorization, resulting in delays to care.

Payers will also have to publicly report metrics about their prior authorization processes, which CMS said will improve transparency.

Several members of Congress have introduced similar legislation.

 The House Ways and Means Committee advanced a bill in July that would require Medicare Advantage plans to issue “real-time” decisions for commonly approved services and report information about denials.

Peggy Tighe, a health care lobbyist at Powers Pyles Sutter and Verville’s legislative group who has pushed for prior authorization reform for the Regulatory Relief Coalition, said the rule will pave the way for legislative action.

The hope is that the rule will reduce the Congressional Budget Office’s score of the legislation, making it easier to pass, she said.

“We still see a path towards enacting legislation,” Tighe said. “In fact, we see a better path towards enacting legislation.”

Rep. Suzan DelBene, D-Wash., sponsor of the House prior authorization legislation, said in a statement with co-sponsors Wednesday that the final rule is “a major win for seniors and their families.” 

“Now, Congress must act to cement these gains into law,” the lawmakers said.

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