The New Era of Prior Authorizations – Provider Readiness

Prior-authorization (PA) — long a source of frustration for providers, patients, and payers alike—is undergoing a major transformation.  Recently announced federal regulations and emerging industry initiatives aimed at improving transparency and reducing administrative burden have coalesced around new automation, standardization, and transparency requirements and actions.  The result will be a foundational change to the legacy processes for providers to request and secure prior authorizations from health insurers.    The key players in these efforts have included:

American Health Insurance Plans (AHIP) Backed Industry Pledge Announced June 2025:  Over 50 major insurers—including UnitedHealthcare, Aetna (CVS Health), Cigna, Humana, Elevance, and Kaiser Permanente—have committed to significant reforms by:

• Reducing the number of services requiring PAby January 1, 2026
• Standardizing electronic PA (ePA) processeswith real-time response targeted by January 1, 2027
• Honoring prior approvals for 90 days when patients switch plans mid-treatment

Centers for Medicare and Medicaid Services (CMS) Final Rule (effective 2026–27):

• Mandates 72-hour turnaround for urgent PA requests and 7-calendar-day turnaround for routine requests
• Payors must provide clear reasons for denials
• Payors must publicize PA metrics
• Payors required to support ePA Application Programming Interfaces (APIs) via HL7 Fast Health Interoperability Resources (FHIR)

For providers, understanding these changes and proactively adapting their operations will be key to ensuring seamless patient care and timely reimbursement.

What is Changing?

1. Federal Mandates for Electronic Prior Authorization (ePA) – Starting in 2026, new CMS rules require many payers, including Medicare Advantage and Medicaid managed care plans, to implement ePA processes using standardized APIs. This is part of a broader push for interoperability and aims to streamline how providers submit requests and receive decisions.
2. Real-Time Decision-Making – The future of prior-authorization will be real-time. Advanced systems leveraging artificial intelligence and integrated EHR workflows will enable automated approvals at the point of care—targeting the elimination of wait times and reducing the burden on provider and payer staff. 
3. Transparency and Justification Requirements – Insurers will need to provide specific reason codes when denying prior authorizations, along with clearer guidelines on what services require approval. This increased transparency will help providers better understand and challenge payer decisions when needed.
4. Gold Carding and Utilization Metrics
   Some payers are planning to introduce “Gold Card” programs that will exempt providers with high approval rates from prior authorization requirements altogether. These programs will likely depend on data-driven thresholds and performance tracking which may require additional internal provider analytics and reporting

Suggested Actions:

1. Assess Technology Integration Requirements and Readiness – Adopting or upgrading EHR systems that support ePAs will be essential. Select platforms with a demonstrated ability to integrate with payer APIs and capabilities that will support real-time decision-making directly within existing or new clinical workflows.
2. Train Staff on New Workflows – As the process becomes more automated, the role of your administrative staff will likely shift. Staff will require training not only on the new or enhanced EHR and ePA tools but also on interpreting payer responses, escalating exceptions, and using automated dashboards to track pending authorizations.
3. Audit and Optimize Internal Processes – Consider conducting a detailed evaluation of your current prior-authorization procedures. Are there existing bottlenecks? What is causing them? Which services most often require manual intervention? Use these insights to streamline your operations to align with the new automated PA systems and interfaces
4. Monitor Payer Performance – Establish or enhance reporting and analytics to track how quickly and accurately different payers are processing prior-authorizations under the new framework. This data will be critical to help identify issues, adjust workflows, and advocate for fairer payer policies

Final Thoughts:

The shift towards a more automated and transparent prior-authorization process is a welcome change for the entire healthcare industry.   While this transition may introduce some near-term challenges, it also creates an opportunity for providers to reduce administrative costs, improve patient care and satisfaction, and gain more control over their revenue cycle.   Aligning these changes will allow providers to thrive in a reimagined healthcare landscape where access to timely care should be paramount.

To learn more about how Sunstone is helping our Provider clients proactively identify and modernize systems, assess team training requirements and optimize PA related workflows to align with this new era of Prior-Authorizations, please visit our website at www.sunstonemanagementadvisors.com.