Why Is There Prior Authorization For Doctor-Recommended Care?

Prior authorization began as a targeted cost-control mechanism for high-cost, low-evidence interventions. Insurers wanted a review step for say, expensive, experimental cancer treatments. It has since expanded into a system-wide administrative process that intentionally adds friction to everyday medical care.

Here’s how it works in practice. When getting a treatment approved requires jumping through prior authorization hoops, fewer treatments get delivered. Physicians become less likely to order services they know will trigger a lengthy approval process. And when patients or doctors push back, insurers can simply wait them out: bury the request in paperwork, require more documentation or schedule a peer-to-peer review. Many give up before the treatment is ever approved.

This happens because of how the system incentivizes the insurer. Insurers collect fixed premiums regardless of how much care they pay for. Every denied or delayed treatment is money saved.

According to a 2024 AMA survey, physicians now complete an average of 39 prior authorization requests per week. This has grown steadily over the past decade, consuming more than 13 hours of physician and staff time. That’s roughly one and a half full workdays devoted not to patients but to convincing insurers that recommended treatments are necessary.

The AMA survey found that 94% of physicians report prior authorization delays patient care. More than 1 in 4 said it has led to a serious adverse event in their practice, including hospitalization, permanent impairment or death. Another 82% report patients simply abandoning recommended treatment after running into authorization barriers.

Greater than a third of physicians employ staff members exclusively to handle prior authorization requests. A study published in Health Affairs Scholar found that prior authorization accounts for $35 billion in annual U.S. healthcare administrative spending. A substantial portion of this generates no direct clinical value.

What the 2024 CMS Rule On Prior Authorization Reform Changed

The 2024 CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F), took effect Jan. 1, 2026. It was a significant toward prior authorization reform. It applies to non-drug medical services (such as surgeries or radiation for cancer treatment) in Medicare Advantage plans, state Medicaid agencies, managed care plans, Children’s Health Insurance Programs and Affordable Care Act marketplace plans. Those entities are now required to respond to expedited prior authorization requests within 72 hours and standard requests within seven calendar days. Previously, standard timelines could stretch to two weeks or longer.

It also requires payers to provide a specific reason for every prior authorization denial. It ostensibly ends the era of generic rejections that gave physicians no actionable basis for appeal. Additionally, payers now must publicly report their prior authorization metrics. This includes approval rates, denial rates and appeal outcomes. By 2027, they must connect with providers through electronic systems, replacing the fax-era workflows that still define most prior authorization interactions today.

What the CMS Prior Authorization Reform Proposal For Drugs Would Change

The 2024 rule explicitly excluded prescription medications. This left in place some of the most burdensome authorization requirements. This particularly affects Part B drugs administered in clinical settings, biologics and specialty medications central to managing chronic disease.

If approved, CMS’s newly proposed rule would close that gap. For urgent drug requests, payers would face a 24-hour decision deadline. For standard requests, the window would be 72 hours. This is a substantial compression from current timelines that can stretch days or weeks. The rules would apply across Medicare Advantage, Medicaid, CHIP and ACA marketplace plans. Compliance dates could begin in October 2027.

The proposal also modernizes the technical plumbing underlying drug prior authorization. CMS is proposing to shift from paper and phone-based approvals to real-time electronic systems. This would enable automated submission of clinical documentation and dramatically reduce the back-and-forth that currently defines most drug authorization interactions.

Transparency provisions would be expanded as well. Payers would be required to publicly report drug-specific prior authorization metrics. This would create accountability that currently does not exist for pharmaceuticals, allowing consumers to assess this information before choosing a health plan.

How New AI Processes Complicate Prior Authorization Reform

Health insurers have moved aggressively to use AI to process authorization requests to get to faster decisions and reduce administrative burden. Yet what may be happening on the ground does not appear to be achieving these goals.

An AMA survey earlier this year found that 61% of physicians believe payers’ use of AI is actually increasing denials. This is amplified by reporting that some systems were rejecting claims at high volume without adequate clinical review.

Beginning in 2026, CMS requires payers to provide a specific reason for every AI-assisted denial and to publish aggregate approval data. This is designed to prevent scaled, algorithmic black boxes from overriding clinical judgment. Yet, whether these guardrails prove sufficient will depend heavily on enforcement.

The bipartisan Improving Seniors’ Timely Access To Care Act, reintroduced in the current Congress, would codify real-time electronic prior authorization in Medicare Advantage and add further protections. Several states, following Connecticut’s lead, are moving to bar insurers from making coverage decisions with AI alone.

Here’s How Prior Authorization Reform Could Play Out

Much of the press coverage of prior authorization has not reported on how all of this is working in practice. This is because key provisions of the 2024 rule only took effect this January. Three months into implementation, no peer-reviewed outcome studies have been published. Transparency reporting that will generate the first real-world data on payer performance only became due in March 2026.

CMS’s own $15 billion savings projection is also just a regulatory impact estimate. During rulemaking, pilots were not conducted before the 2026 compliance dates.

The technology backbone of the rule is also still being built. Electronic prior authorization systems are not required until January 2027. One industry analysis found that only 35% of health plans were using full electronic prior authorization systems as of 2024. This means that a substantial portion of the industry may be still operating on legacy infrastructure. Faster decision deadlines on paper do not automatically translate to faster decisions in practice if the underlying systems haven’t changed.

The gap between mandate and reality is something CMS leadership has acknowledged directly. “There should be no human working on prior authorization, period," Chris Klomp, CMS Director of Medicare, told physicians at the AMA’s National Advocacy Conference in February 2026. ”We have the technology to effectuate appropriate clinical care based on your judgment, your decisions, very, very quickly, and that’s what we’re driving for."

What Doctors, Health Systems and Patients Should Do Now About Prior Authorization Reform

The most immediate practical implication of the 2024 rule that’s already in effect is the new timeline for non-drug prior authorization appeals. If an insurer fails to meet the 72-hour urgent or seven-day standard deadlines, it’s a compliance issue, not simply a delay. Physicians or health systems that experience consistent violations should document them and report to CMS or their state insurance commissioner.

Additionally, as data on insurer-level prior authorization denial and appeal rates become publicly available, doctors and their professional societies should monitor it closely. This will help shine a light on the worst-performing plans and build the case for further reform.

For patients, the proposed rule for drugs is an area that’s been conspicuously missing from the 2024 reforms: protection at the pharmacy and infusion center. If finalized as proposed, the new rule would mean that when your doctor prescribes a medication that requires prior authorization (e.g. a specialty medication, a biologic for a chronic condition or cancer drug), insurers would face hard legal deadlines for response. Additionally, each denial would require a specific, actionable reason. This would end the rejections without clear reason that give patients and physicians no basis for appeal.

On the drug side, the proposed rule will go through a public comment period before finalization. The comment period is open until June 15, 2026. Medical societies — particularly those managing high prior authorization burden in oncology, rheumatology and psychiatry — should submit comments advocating for the strongest possible implementation, including shorter timelines and tighter AI guardrails.

Ultimately, prior authorization reform is here. The proposed drug rule, if finalized and enforced, would extend protections being those implemented now to the medication space. The faster decisions, mandatory denial explanations and public accountability data represent a real change in a broken system where insurers had the ability to create tremendous friction and delays in treatment.