Leila Sullivan, Zeynep Celik, and Amy Killelea
Prior authorization (PA) is a utilization administration approach utilized by well being insurers that requires suppliers to hunt approval from the insurance coverage plan earlier than the plan will comply with pay for a coated process, service, or treatment. Insurers can leverage PA to manage well being care spending, each by negotiating decrease costs for companies that they don’t topic to PA and utilizing PA to restrict entry to sure higher-price companies.
Whereas insurers contend that PA additionally permits them to make sure care is clinically acceptable, PA has been linked to opposed well being outcomes for sufferers, in addition to delays and frustration within the US well being care system. The administrative prices related to PA are additionally important, and a worthwhile cottage trade of middlemen has grown to assist each insurers and suppliers navigate PA.
In response to rising issues about PA abuses, coverage makers on the federal and state ranges are more and more implementing reforms that concentrate on the processes insurers use, the substance of their necessities, or each. This text explores key traits in PA reform and what these reforms imply for customers. We primarily concentrate on the business medical insurance market, though some insurance policies apply extra broadly.
Federal-Degree Motion
Beneath the Biden administration, the Facilities for Medicare and Medicaid Companies (CMS) finalized a new rule on using PA in federal Market plans in addition to these supplied by Medicare Benefit and Medicaid/CHIP. Most importantly, the foundations require that by 2027 insurers should have in place an software programming interface by which customers and suppliers can be taught:
- whether or not PA applies to particular gadgets or companies,
- any related documentation necessities, and
- the standing of pending or processed requests, together with the particular causes for any denials.
Moreover, beginning in 2026, affected payers should put up on-line specified information on PA requests and determinations. The principles additionally standardize sure elements of insurer PA processes starting in 2026. For instance, insurers should put timelines in place for PA determinations for Medicare Benefit and Medicaid/CHIP such that commonplace requests are addressed inside seven calendar days and, for expedited requests, inside 72 hours. For federal Market plans, preexisting timelines stay in place, which permit plans as much as 15 days to course of commonplace requests, whereas expedited requests are restricted to 72 hours.
Throughout all payers and provisions, the above guidelines apply solely to medical advantages and never pharmaceuticals, leaving a big regulatory hole for sufferers and suppliers. In a separate rule finalized this summer time, nonetheless, CMS has required that licensed digital well being report programs enable for digital prior authorization of pharmaceuticals.
Then in June 2025, medical insurance trade leaders in coordination with the Trump administrationvoluntarily pledged to streamline and enhance their PA processes throughout markets. Starting in 2026, pledge contributors promise to cut back the quantity of companies topic to PA, honor PA approvals by different plans throughout protection transitions, and supply clear explanations of their PA determinations. By the next 12 months, they commit to creating real-time approvals on most requests and standardizing digital PA request submissions.
State Motion
Many states are taking issues into their very own hand, adopting their very own guidelines for the totally insured medical insurance market. In the course of the 2024 legislative session, 10 states handed laws reforming PA. Since January 1, 2025, a minimum of 18 states have taken legislative motion on PA (see exhibit 1 right here).
Exhibit 1: 2025 Enacted Laws On Prior Authorization
Supply: The authors’ analysis consists of state stage actions enacted between January 1st, 2025 and August thirtieth 2025
State reforms typically fall alongside two dimensions: course of modifications and substantive modifications.
Just like the federal interoperability rule, many state-driven modifications tackle procedural elements of PA reminiscent of:
- how rapidly insurers should course of requests,
- how lengthy approvals final,
- which channels can be utilized for PA requests, and
- what data insurers should open up to customers and suppliers.
Different state reforms are extra substantive. Some goal to stop insurers from denying entry to clinically advisable care and remedy. Others search to make sure that solely well being care professionals with related experience could make denial choices.
Course of Reforms
A major focus of latest state procedural PA reforms has been timelines. These can embody each the required turnaround instances for approving or denying a PA request and the period for which an approval stays legitimate. New legal guidelines in Alaska, Delaware, Indiana, Iowa, Nebraska, North Dakota, Oklahoma, and Virginia require insurers to course of pressing prior authorization requests on timelines that vary from 24 to 72 hours for pressing requests, and a couple of to fifteen days for non-urgent requests, relying on the state.
Indiana’s regulation provides a powerful incentive for well timed insurer PA processing: If the insurer misses the deadline, the request is routinely authorised. Alaska and Montana outlined how lengthy an approval lasts for circumstances requiring continual care, setting a minimal period of 12 months. Alaska’s regulation additionally requires that if the remedy plan for a continual situation stays the identical after the preliminary 12-month interval, the PA is routinely renewed.
A number of states (Arkansas, Indiana, Montana, North Dakota, and Nebraska) have additionally taken measures to make sure continuity of take care of sufferers and preserve PA approvals for the primary two to 3 months following a change in medical insurance protection. These measures goal to cut back delays in care, decrease repeated paperwork, and supply sufferers, particularly these with ongoing well being wants, with higher stability and continuity of their remedy.
As talked about above, CMS issued a ultimate rule in early 2024 to enhance PA processes in Medicare Benefit, Medicaid/CHIP, and plans supplied on the federal Market. A core focus of the rule was to require plans to make data on PA and plan approval standards simply (and electronically) accessible to sufferers and suppliers. State lawmakers have additionally taken motion to require plans to be extra clear about their PA processes, with a number of states in 2025 enacting measures to extend affected person and supplier entry to PA data and to require plans to report on PA to state regulators.
Nebraska, Arkansas, and North Dakota, for instance, now require insurers to publicly put up PA insurance policies, medical standards, and documentation necessities in a transparent and accessible format for sufferers. All states in exhibit 1, besides Indiana, additionally embody prescription drug PA of their legal guidelines in an effort to fill the foremost hole within the federal rule, which excluded pharmaceuticals from the PA reforms included within the rule. Along with transparency, these reforms goal to standardize digital PA processes in ways in which allow quicker, extra constant resolution making and cut back administrative burdens for suppliers and sufferers. By making this data available, sufferers can higher perceive what’s required for approval, anticipate potential delays, and make extra knowledgeable choices about their care.
Substantive Reforms
In 2025, a number of states enacted substantive reforms to PA processes, specializing in how medical evaluate standards are outlined, who makes determinations, and whether or not sure companies or suppliers will be excluded from PA.
Alaska and Nebraska now require carriers to depend on peer-reviewed and evidence-based medical evaluate standards and to make sure that opposed determinations are made by certified medical friends. These reforms goal to enhance adherence to greatest practices. Montana, North Dakota, and Virginia strengthened affected person protections by prohibiting retroactive PA denials, with North Dakota and Virginia permitting restricted exceptions.
States have additionally strengthened oversight of resolution making in PA determinations. Arizona now requires denials primarily based on medical necessity to be individually reviewed by a medical director. A number of states addressed the rising use of synthetic intelligence (AI) in utilization administration amid issues linking it to larger denials. Maryland’s reform requires carriers to reveal using AI in reporting, reinforces that human oversight is necessary, and prohibits AI instruments from getting used to disclaim, modify, or delay care. Texas equally bans automated programs from issuing opposed determinations with out human evaluate, though it does allow AI for administrative help or fraud detection. These provisions goal to make sure know-how is supporting medical judgment as an alternative of changing it.
Different reforms have focused PA necessities by exempting sure low-risk companies and high-performing suppliers, whereas streamlining approval processes or routine or ongoing remedies.
Some new legal guidelines have allowed for expanded “gold carding” packages beneath which insurers exempt sure suppliers from prior authorization necessities primarily based on their monitor report of approvals or on different requirements. Arkansas amended its gold carding program to refine analysis durations and eligibility standards. And Texas now waives PA for suppliers with a 90 p.c approval charge for a service. Rhode Island eradicated PA for routine major care companies ordered by a major care doctor throughout a three-year pilot program starting October 1, 2025, whereas Colorado eliminated further PA necessities for sure dose and frequency changes to beforehand authorised continual upkeep medicine. Montana prohibits PA for each short- and long-acting insulin (whether or not generic or model title) and limits repeat step-therapy protocols when a affected person has already failed required medicine. Collectively, these modifications mirror a broader state-level push to cut back delays in care whereas preserving oversight the place clinically acceptable.
Trying Forward
The rising variety of reforms displays an elevated recognition that, beneath the present well being care system, PA usually delays care and creates important administrative burdens. Course of reforms designed to streamline procedures and shorten approval timelines, together with substantive reforms supposed to make sure extra evidence-based determinations, symbolize significant progress. Many states’ 2025 legislative actions complement federal motion. Nonetheless, with most formidable reforms occurring on the state stage, sufferers’ experiences will proceed to range extensively primarily based on the place they stay and the kind of protection they maintain.
Authors’ Word
The authors want to thank Billy Derring and Vrudhi Raimugia for his or her help on this text.
Leila Sullivan, Zeynep Celik, and Amy Killelea “Prior Authorization Reform Heats Up” November 24, 2025, https://www.healthaffairs.org/content material/forefront/prior-authorization-reform-heats-up. Copyright © 2025 Well being Affairs by Challenge HOPE – The Individuals-to-Individuals Well being Basis, Inc.
