Modernizing Prior Authorization for a Faster, Smarter Healthcare System
Prior authorization has been a source of frustration for providers and patients for a long time. The paperwork, the fax machines, the days spent waiting for a decision that should take hours. Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz is directly calling for an end to what he described as the paper-based process that drags on for days or even weeks while clinicians waste hours filling out forms and waiting by the phone.
The numbers behind the frustration are hard to ignore. Completing prior authorizations costs healthcare providers between $20 and $50 per hour and takes an average of 13 hours per week. That works out to roughly $34,000 and 700 hours per year, per provider, spent on paperwork rather than patient care.
The response from Centers for Medicare and Medicaid Services is a significant one. Building on a pledge made last year with major health plans to streamline the process, the agency is now bringing the entire health technology ecosystem into the effort. Health systems, hospitals, physician practices, electronic health record vendors, and digital health developers are joining payers as part of a unified coalition with one shared goal: making electronic prior authorization work end-to-end, on time, for every patient.
Some early results are already in. Leading health plans announced in April that they eliminated 11% of prior authorizations across a range of medical services, representing 6.5 million fewer prior authorizations for patients. One large national plan has committed to removing authorization requirements for 30% of healthcare services entirely.
On the regulatory side, as of January 01, 2026, impacted payers across Medicare Advantage, Medicaid, CHIP, and Marketplace plans are required to send prior authorization decisions within 72 hours for urgent requests and 7 calendar days for standard ones. Electronic prior authorization interfaces from these payers are set to go live on January 01, 2027, and will eventually be tied into the Medicare Promoting Interoperability Program and the Merit-based Incentive Payment System for clinicians.
The projected savings from these reforms sit at approximately $15 billion over ten years.
The technical foundation for all of this is built around two standards: National Council for Prescription Drug Programs standards for pharmacy benefit drugs and Fast Healthcare Interoperability Resources standards for medical items and services. Centers for Medicare and Medicaid Services has been working directly with electronic health record vendors to embed electronic prior authorization into existing clinical workflows rather than bolting it on as a separate process.
The goal is a system where data flows seamlessly between a provider's electronic health record, the payer's authorization interface, and the patient's health record. When that works the way it should, the whole system becomes more responsive and patients get the care they need without unnecessary delays.
