Prior Authorization Reforms: The New Reality

Prior authorizations have been a feature of the American health care system for many years. The health insurance industry has been roundly criticized for its implementation of these programs and in 2018 issued a Consensus Statement for change.¹ Health plans did virtually nothing to fulfill their pledges, so in 2025 they had to reissue a statement of intent,² which was met with much fanfare despite being a much watered-down version. Against this backdrop, regulators have finally stepped in. Additionally, a number of states have recently enacted reforms, and Congress has enacted new provisions for national reform of pharmacy benefit managers (PBMs), the vanguard for pharmacy prior authorization. Health plans have begun to respond to the pressure by making some voluntary changes as well.

Physicians should be aware of these reforms so they can exercise their rights properly within the new rules. Many of the reforms are surprisingly detailed, so this article summarizes the major features.

Effective Jan. 1, 2024, the Centers for Medicare & Medicaid Services (CMS) adopted prior authorization reform regulations for Medicare Advantage (MA) plans (CMS-4201-F). These plans must follow traditional Medicare statutes, regulations, National Coverage Determinations (NCDs), and Local Coverage Determinations (LCDs) when making medical necessity determinations. If coverage criteria are not “fully established” in applicable Medicare statutes, regulations, NCDs, or LCDs, MA plans may create their own coverage criteria based on current evidence in widely used treatment guidelines or the clinical literature. Coverage criteria can be characterized as not “fully established” when additional, unspecified criteria are needed to interpret or supplement general provisions in order to determine medical necessity consistently. In this situation, the MA organization must demonstrate that the additional criteria provide clinical benefits that are highly likely to outweigh clinical harms, including from delayed or decreased access to items or services. Further, they must post their coverage criteria on their website and provide a public summary of the evidence they considered.

Approvals granted through PA processes must be valid for as long as medically necessary to avoid disruptions in care in accordance with applicable coverage criteria, the patient's medical history, and the treating clinician's recommendation. If a service is initially approved, it may not later be disapproved on medical necessity grounds. MA plans must provide a minimum 90-day transition period when an enrollee who is currently undergoing treatment enters an MA plan, whether the enrollee is new to Medicare or switching from traditional Medicare. During this transition period, the MA organization must not disrupt or require reauthorization for an active course of treatment.