The Centers for Medicare & Medicaid Services (CMS) on Friday released a proposed rule aimed at modernizing prior authorization for prescription drugs. The rule would require faster prior authorization decisions, expand electronic prior authorization to drugs, and increase transparency across federal programs.
The 511-page 2026 CMS Interoperability Standards and Prior Authorization for Drugs Proposed Rule, which is scheduled to be published in the Federal Register on Tuesday, builds on earlier CMS interoperability initiatives and seeks to significantly reduce delays, administrative burden, and opacity in how payers handle drug-related prior authorizations.
If finalized, the rule would introduce tighter decision deadlines, expand electronic prior authorization requirements to prescription drugs, and require public reporting of new metrics to increase accountability across payers. CMS says the changes are designed to ensure patients can access prescribed medications faster while enabling providers to spend less time navigating manual and duplicative processes.
“Patients should not have to wait days or weeks for approval to start the medication their doctor prescribed,” said CMS Administrator Dr. Mehmet Oz in an announcement about the proposed rule. “This proposal moves prior authorization into the digital age, replacing fax machines and fragmented systems with real-time electronic workflows. We are standardizing the process, increasing transparency, and ensuring providers can focus on caring for patients instead of navigating red tape.”
The proposed rule would:
Move prior authorization into the digital age
At the center of the proposal is CMS’ continued push to replace paper- and fax‑based prior authorization systems with standardized, real‑time electronic workflows. While CMS finalized electronic prior authorization requirements for non‑drug items and services in 2024, the new proposal extends many of those requirements to prescription drugs, aligning policy across benefits and programs.
The rule would require payers for Medicare Advantage plans, Medicaid, The Children's Health Insurance Program, and Qualified Health Plan (QHP) issuers on the federally facilitated exchange, to support electronic prior authorization for drugs covered under both medical and pharmacy benefits. For pharmacy benefits, CMS would require adoption of established National Council for Prescription Drug Programs (NCPDP) standards, which already underpin Medicare Part D processes.
In parallel, the Department of Health and Human Services (HHS) proposes to adopt HL7® Fast Healthcare Interoperability Resources (FHIR®) standards for HIPAA-covered entities engaged in electronic prior authorization transactions. These standards would supplement older transaction frameworks and support structured data exchange, attachments, and clinical documentation using modern APIs.
Faster, more consistent decision timeframes
A major policy focus of the proposed rule is speed. CMS is proposing standardized and shorter timelines for prior authorization decisions related to drugs, with requirements varying slightly by payer and program but generally tightening existing expectations.
For example, Medicaid and CHIP programs would be required to issue decisions on drug prior authorization requests generally within 24 hours, aligning with existing protections for covered outpatient drugs. QHP issuers on the federally facilitated exchanges would be required to issue decisions within 72 hours for standard requests and 24 hours for expedited requests. CMS argues that shortening and aligning these timelines across programs is critical to improving patient access to medications and preventing avoidable delays in care.
Greater transparency around denials and metrics
In addition to speed, CMS is prioritizing transparency. Under the proposal, payers would be required to provide providers with specific reasons when a drug-related prior authorization request is denied, helping clinicians understand next steps and reducing unnecessary resubmissions or appeals.
CMS also wants to expand public reporting requirements. Payers would have to publicly report prior authorization metrics for drugs, including approval and denial rates, appeal outcomes, and decision timeframes. New reporting would also include numeric counts—not just percentages—to provide greater context for how often prior authorization is used and how frequently it results in delays or denials.
Separately, CMS would require payers to report new API usage metrics to the agency, allowing federal oversight of how well electronic prior authorization and interoperability requirements are working in practice.
Compliance timelines and public input
Most of the proposed requirements would take effect beginning October 1, 2027, with reporting obligations following in 2028 based on 2027 data. CMS says the phased approach is intended to give payers, providers, and vendors time to implement technical changes while ensuring patients experience improvements as quickly as possible.
CMS is also seeking public input through five Requests for Information (RFIs), covering topics such as step therapy, cybersecurity, payer API oversight, and prior authorization for laboratory tests and durable medical equipment. Stakeholder feedback will help inform future rulemaking and refinement of interoperability policies.
For more information, read the fact sheet.