CMS Proposes Sweeping Prior Authorization Reforms for Drugs, Expanding Transparency and Electronic Requirements

Key Takeaways 

• The Centers for Medicare & Medicaid Services (CMS) has proposed a major rule to modernize prior authorization for drugs, including mandatory decision timelines of 24 hours for urgent requests and 72 hours for standard requests.
• The rule would expand electronic prior authorization (ePA) requirements using Fast Healthcare Interoperability Resources (FHIR)-based standards and impose new transparency and reporting obligations on payers.
• If finalized, the reforms could significantly impact payer operations, provider workflows, and market access dynamics across federal health programs beginning in 2027.

CMS has proposed a wide-ranging rule aimed at modernizing prior authorization for prescription drugs, accelerating patient access to therapies, and increasing transparency across federal health programs.

The proposed “Interoperability Standards and Prior Authorization for Drugs” rule would extend electronic prior authorization requirements to medications and establish standardized decision timelines, marking a significant expansion of CMS’s prior authorization reforms beyond medical services.

CMS Targets Delays in Drug Access With Standardized Timelines

A central feature of the proposal is the establishment of clear deadlines for prior authorization decisions. Under the rule, impacted payers would be required to issue determinations within 24 hours for urgent requests and 72 hours for standard requests.

These timelines are intended to reduce delays that can disrupt treatment initiation, particularly for patients requiring timely access to high-cost or specialty medications.

The proposal builds on CMS’s 2024 interoperability rule, which addressed prior authorization for non-drug items and services, and reflects a broader effort to align utilization management processes across covered benefits.

Expansion of Electronic Prior Authorization Requirements

The rule would require payers to implement ePA processes for drugs using standardized, interoperable technology.

Specifically, CMS proposes adopting FHIR-based standards to support real-time electronic workflows, replacing legacy systems such as the X12N 278 transaction standard currently used by a limited number of plans.

These changes are expected to:

• Enable real-time or near real-time prior authorization decisions
• Streamline submission of clinical documentation
• Reduce reliance on manual processes such as faxing
• Improve consistency and accuracy in utilization management

The requirements would apply broadly across Medicare Advantage, Medicaid, the Children’s Health Insurance Program (CHIP), Qualified Health Plans (QHPs) on federally facilitated exchanges, and small group market plans on the FF-SHOP.

New Transparency and Reporting Obligations for Payers

In addition to operational changes, the proposed rule would introduce expanded transparency requirements for prior authorization decisions related to drugs.

Impacted payers would be required to publicly report:

• Prior authorization approval and denial rates
• Appeal outcomes
• Decision timeframes

Plans would also report application programming interface (API) usage metrics to CMS, allowing the agency to monitor adoption and performance of electronic prior authorization systems.

These reporting requirements are designed to increase accountability and provide stakeholders—including patients, providers, and policymakers—with greater visibility into how consistently and efficiently prior authorization requests are handled.

Broader Interoperability and Oversight Provisions

The proposal includes several additional provisions aimed at strengthening CMS oversight and advancing health IT modernization, including:

• Updating health IT standards to align with current federal interoperability frameworks
• Expanding interoperability requirements to additional plan types, including small group market QHP issuers
• Introducing a regulatory definition for “failure to report” under the Open Payments program to enhance enforcement authority

CMS is also soliciting stakeholder input through multiple Requests for Information (RFIs), including on:

• Step therapy processes
• Prior authorization for laboratory tests and durable medical equipment
• Cybersecurity and system resilience
• Oversight of payer APIs

These RFIs suggest potential areas for future rulemaking and continued expansion of CMS’s interoperability and utilization management policies.

Implications for Payers, Providers, and Life Sciences Stakeholders

If finalized, the proposed rule would have significant implications across the health care ecosystem.

For payers, the rule introduces operational and compliance challenges, including the need to:

• Meet accelerated decision timelines
• Implement and maintain interoperable ePA systems
• Comply with new public reporting obligations

For providers and pharmacies, the reforms may reduce administrative burden and improve the timeliness of treatment decisions, although successful implementation will depend on system integration and workflow alignment.

For pharmaceutical manufacturers, the rule could influence market access and utilization management dynamics, particularly as increased transparency into prior authorization practices may affect formulary strategies and payer behavior.

Implementation Timeline

CMS proposes compliance dates beginning in 2027, providing stakeholders with a multi-year implementation window to update systems, processes, and reporting infrastructure.

Looking Ahead

The proposed rule reflects CMS’s continued focus on balancing access, efficiency, and oversight in drug coverage decisions. By expanding electronic prior authorization requirements and increasing transparency, the agency is seeking to modernize utilization management while addressing longstanding concerns about delays and administrative complexity.

As the rulemaking process proceeds, stakeholder feedback will likely shape the final framework and determine how these reforms are operationalized across federal health programs.

Reference

CMS Proposes Major Reforms to Speed Up Patient Access to Drugs, Increase Transparency, and Reduce Administrative Burden. Press release. CMS. Published April 10, 2026. Accessed April 15, 2026. https://www.cms.gov/newsroom/press-releases/cms-proposes-major-reforms-speed-up-patient-access-drugs-increase-transparency-reduce-administrative