CMS Proposes New Standards for Drug Prior Authorization

April 13, 2026

A new CMS proposed rule would require insurers to process prior authorization requests for drugs more quickly and publish approval and denial rates.

In a fact sheet, the agency said the goal of the new proposed rule for Medicaid and CHIP and other Medicaid plan administrators is to “improve prior authorization so patients and providers can benefit from a more expeditious, transparent, and reliable process.”

The proposal follows the agency’s 2024 Interoperability and Prior Authorization final rule and is part of the larger effort to establish electronic standards for prior authorization. 

Here are takeaways from the proposed rule:

What it does

The proposal expands electronic prior authorization requirements to include drugs, aligning Medicare Advantage, state Medicaid programs, CHIP, Medicaid managed care, and state and federal marketplace plans.

Changing timeframes

Medicaid and CHIP programs, state Medicaid fee-for-service programs, Medicaid managed care plans, and CHIP managed care entities would be required to make prior authorization decisions for all drugs no later than 24 hours after receiving a prior authorization request. This aligns with requirements for covered outpatient drugs.

Exchange plans would be required to provide notice of a prior authorization decision to the requesting provider “as expeditiously as the enrollee’s health condition requires.” This would be later than 72 hours after a standard prior authorization request or 24 hours for an expedited prior authorization request for all drugs.

The Medicaid and state and federal marketplace drug prior authorization time limits would begin October 2027.

The plans also would be required to offer providers a specific reason for denying prior authorization requests for any drugs.

Reporting requirements

Payors would be required to report prior authorization metrics for drugs, such as approval and denial rates, appeal outcomes, and decision timeframes.

“Making these data available should build trust with patients and providers and showcase commitment to improving services,” the agency said in a statement.

Other areas

The agency also is seeking opportunities to build resiliency against hacking, ransomware, and other health care cybersecurity attacks; improving electronic event care coordination; enhancing oversight of payor Application Programming Interfaces; step therapy processes; and prior authorization requests for lab tests and durable medical equipment.

A CMS press release and fact sheet are available online.