Contributor: Prior Authorization in 2026—CMS Is Rebuilding the Operating Model

Prior authorization has become one of the clearest points where administrative complexity directly affects patient care. For health systems, it is no longer just a utilization management tool. It shapes access, delays therapy, and increasingly defines the operational and technology infrastructure required to deliver care.

That is why the CMS 2026 proposed rule on interoperability standards and prior authorization for drugs is significant. Released in April 2026, the proposal expands prior authorization reform beyond nondrug items and services and directly into drugs covered under both medical and pharmacy benefits.¹ It introduces requirements for electronic prior authorization, shorter decision timelines, more specific denial explanations, and standardized data exchange. Comments are due June 15, 2026.

This is not an incremental change; it reflects a shift in how CMS is approaching prior authorization, moving from burden reduction to system design.

Why This Rule Matters

Prior authorization volume remains high, and the disconnect between administrative processes and clinical urgency persists.

KFF reported that Medicare Advantage insurers made 52.8 million prior authorization determinations in 2024, denying 4.1 million, or 7.7%, of requests.² Only 11.5% of denied requests were appealed, but when appeals were filed, 80.7% were at least partially overturned. That suggests a system where a meaningful amount of care may be delayed even when it is ultimately approved.

The provider experience tells a similar story. In the AMA's 2024 physician survey, 29% of physicians said prior authorization had led to a serious adverse event for a patient in their care, and practices reported completing an average of 39 prior authorizations per physician per week.³ The same survey found that prior authorization can lead to additional office visits, hospitalizations, and out-of-pocket spending for patients.

CMS is addressing these concerns by focusing on both volume and organizational structure.

Drugs Are Now in Scope

Earlier reforms focused on non-drug items and services.⁴ This proposal brings drug prior authorization into the same interoperability framework, requiring payers to support electronic workflows for both medical-benefit and pharmacy-benefit drugs.

For health systems, particularly those with specialty pharmacy and high-cost therapeutic areas, this is consequential. Performance will depend less on manual workarounds and more on how effectively systems exchange data across electronic health records (EHRs), pharmacy platforms, and payer systems.

CMS Is Tightening the Clock

CMS is also tightening decision timelines. For Medicaid and CHIP fee-for-service programs, CMS proposes 24 hours as the standard turnaround for covered outpatient drugs. For Qualified Health Plan issuers on the federally facilitated exchanges, the proposal sets 72 hours for standard drug requests and 24 hours for expedited requests.

This is a critical shift as electronic processes alone do not improve access if decisions remain delayed. By pairing interoperability with defined timelines, CMS is addressing both efficiency and clinical relevance.^1,4

Transparency Is Expanding

The proposal also advances transparency.

Payers would be required to provide:

• More specific denial reasons
• Expanded reporting infrastructure
• Greater visibility into prior authorization processes

Prior authorization data has historically lacked sufficient detail to be actionable. KFF has noted that insurer-reported prior authorization metrics are still too aggregated to provide meaningful insight into what is actually being approved or denied.⁵ CMS is signaling a move toward measurable, comparable performance across payers.

A Standards-Driven Approach

This proposal is not just about workflow; it is about standards.

Fast Healthcare Interoperability Resources (FHIR)-based application programming interfaces (APIs) and structured documentation requirements will shape how prior authorization data are exchanged across systems.^1,4 This will influence vendor development, EHR integration, payer-provider connectivity, and long-term operating models.

Prior authorization is being redesigned as part of a broader digital infrastructure.

What to Watch

Over the next 6 to 12 months, several factors will shape the impact of this rule:

• Alignment across payers, providers, and vendors on interoperability standards
• Whether implementation reflects the clinical complexity of drug therapy
• Increased visibility into payer performance through transparency requirements

What Pharmacy Leaders Should Do Now

Health systems should begin preparing before final rulemaking.

Review workflows by benefit type. Identify where medical- and pharmacy-benefit prior authorization processes diverge and where manual work persists.

Assess interoperability readiness. Ask targeted questions of vendors: Do pharmacy systems support NCPDP SCRIPT or Real-Time Prescription Benefit for pharmacy-benefit drugs? Are Prior Authorization APIs configured for FHIR-based drug coverage and documentation requirements for medical-benefit drugs?

Address managed care contracts now. Contracts executed in 2026 will govern performance during the 2027 compliance period. Prior authorization workflows, turnaround expectations, and electronic capabilities should be addressed as current negotiation priorities.

Engage in the rulemaking process. CMS is accepting comments through June 15, 2026. This is an opportunity to document operational challenges and clinical impacts.

Establish internal performance metrics. Track turnaround times, denial patterns, appeal outcomes, therapy delays, and staff burden to establish a baseline ahead of regulatory changes.

Conclusion

The significance of the 2026 CMS proposed rule is that it reframes prior authorization as infrastructure.

CMS is not simply trying to reduce administrative burden; it is defining the operating model through standards, timelines, and data exchange.

For pharmacy leaders, the implication is clear. Success will depend less on navigating individual payer requirements and more on building systems that operate within a standardized, data-driven environment.

Organizations that prepare now will be better positioned as prior authorization becomes more structured, more transparent, and more central to care delivery.

References

1. 2026 CMS Interoperability Standards and Prior Authorization for Drugs Proposed Rule. CMS. April 10, 2026. Accessed April 23, 2026. https://www.cms.gov/priorities/burden-reduction/overview/interoperability/policies-regulations/cms-interoperability-standards-prior-authorization-drugs-proposed-rule-cms-0062-p

2. Fuglesten Biniek J, Sroczynski N, Freed M, Neuman T. Medicare Advantage Insurers Made Nearly 53 Million Prior Authorization Determinations in 2024. KFF. January 28, 2026. Accessed April 23, 2026. https://www.kff.org/medicare/medicare-advantage-insurers-made-nearly-53-million-prior-authorization-determinations-in-2024/

3. American Medical Association. 2024 Prior Authorization Physician Survey. AMA Published 2025. Accessed April 23, 2026. https://www.ama-assn.org/system/files/prior-authorization-survey.pdf

4. Interoperability Standards and Prior Authorization for Drugs Proposed Rule. Federal Regstier. Published April 14, 2026. Accessed April 23, 2026. https://www.federalregister.gov/documents/2026/04/14/2026-07205/medicare-and-medicaid-programs-patient-protection-and-affordable-care-act-interoperability-standards

5. Pestaina K. Insurers' Prior Authorization Data Offers Little Insight Into What Gets Approved or Denied. KFF. Published April 2, 2026. Accessed April 23, 2026. https://www.kff.org/quick-take/insurers-prior-authorization-data-offers-little-insight-into-what-gets-approved-or-denied/