What’s at stake
Prior authorization is a health plan cost-control process that AMA survey research shows leads to delayed and abandoned care, negatively affecting patient outcomes. The average physician practice completes 45 prior authorizations per physician, per week, and doctors and their staff spend nearly two business days a week completing such authorizations.
More than nine in 10 physicians (94%) report care delays while waiting for insurers to authorize necessary care, and 80% say prior authorization can lead to treatment abandonment.
One-third (33%) of physicians report that prior authorization has led to a serious adverse event. This includes hospitalization (25%) or disability or even death (9%) for a patient in their care.
Meanwhile, 31% of physicians report that prior authorization criteria are rarely or never evidence-based, with 89% saying prior authorization harms patients’ clinical outcomes.
Prior authorization is overused, costly, inefficient, opaque, and responsible for patient care delays. That’s why we’re standing up to insurance companies to eliminate care delays, patient harm and practice hassles, and why fixing prior authorization is a critical component of the AMA Recovery Plan for America’s Physicians.
Prior authorization is overused, costly, inefficient, opaque, and responsible for patient care delays. That’s why we’re standing up to insurance companies to eliminate care delays, patient harm, and practice hassles, and why fixing prior authorization is a critical component of the AMA Recovery Plan for America’s Physicians.
Centers for Medicare & Medicaid Services (CMS) has released a final rule making important reforms to prior authorization to cut patient care delays and electronically streamline the process for physicians. Together, the changes will save physician practices an estimated $15 billion over 10 years, according to the U.S. Department of Health and Human Services (HHS).
The rule addresses prior authorization for medical services in these government-regulated health plans:
Medicare Advantage.
State Medicaid and Children’s Health Insurance Program (CHIP) fee-for-service programs.
Medicaid-managed care plans and CHIP-managed care entities.
Qualified health plan issuers on the federally facilitated exchanges.
In addition, CMS is mandating shortened processing time frames and also requiring that payers give physicians and patients more prior authorization-related information. Notably, the $15 billion savings estimate does not account for lower patient costs attributable to timelier delivery of physician-ordered care.
Enforcement of these policies, particularly around Medicare Advantage payers, can include CMS sanctions and civil monetary penalties. Starting in 2026, affected payers will have to send prior authorization decisions within 72 hours for urgent requests and within a week for nonurgent requests. For some payers, CMS noted, that would represent a 50% improvement. The AMA strongly advocated faster time frames (PDF) of 24 hours for urgent requests and 48 hours for standard requests. CMS said it will consider updating its policies in future rulemaking.
Why it’s important: While payers claim that prior authorization requirements are used for cost and quality control, a vast majority of physicians report that the protocols lead to unnecessary waste and avoidable patient harm. One-third of the 1,001 physicians surveyed (PDF) by the AMA reported that prior authorization has led to a serious adverse event for a patient in their care.
More specifically, the AMA survey found that these shares of the physician respondents reported that prior authorization led to:
A patient’s hospitalization—25%.
A life-threatening event or one that required intervention to prevent permanent impairment or damage—19%.
A patient’s disability or permanent bodily damage, congenital anomaly or birth defect, or death—9%.
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