How Prior Authorization Regulatory Changes Are Shaping the Healthcare Industry

Imagine you’re a provider with a patient who urgently needs a new medication, but before they can get it, you have to go through a stack of paperwork and wait days for approval. This is exactly what happened when the Centers for Medicare & Medicaid Services (CMS) rolled out a new rule in January 2024 requiring electronic prior authorization (ePA) for Medicare Advantage plans.1 While the intention was to enhance efficiency, the outcome turned out to be strikingly counterproductive. Providers were overwhelmed by the transition, and patients faced delays in accessing critical treatments. It’s these kinds of scenarios that show why prior authorization (PA) reforms are more than just policy updates; they’re lifelines.

In recent years, there has been significant regulatory activity aimed at improving the inefficiencies in prior authorization (PA) processes. For example, the Centers for Medicare & Medicaid Services (CMS) has implemented mandates that require payers to respond more quickly to requests. Previously, patients and providers often faced weeks-long waits for approvals; now, urgent requests must be addressed within 72 hours. Additionally, there has been a strong push for greater transparency, with payers required to publicly disclose their PA criteria and timelines for decisions..1

On the state level, reforms are targeting excessive PA requirements, particularly for common treatments. In states like Texas and California, new laws aim to reduce the administrative burden on providers by removing certain procedures from PA requirements altogether. These changes reflect a growing recognition that overly complex PA systems can do more harm than good.1

Implications for Key Stakeholders

Pharma: For pharmaceutical companies, these regulatory changes bring both advantages and challenges. On the positive side, more efficient prior authorization (PA) processes could lead to quicker access to therapies for patients, which is beneficial for business. However, on the downside, pharmaceutical companies must navigate a disorganized and inconsistent array of payer requirements. This situation requires them to invest in tools and strategies to ensure their products remain accessible under the new regulations.2

Providers: While transitioning to new technologies presents challenges, providers may ultimately find themselves spending less time on the phone negotiating with insurance companies. Training employees to use the electronic prior authorization (ePA) system has required both time and financial investment. Additionally, smaller practices often lack the necessary support to adapt quickly to these changes. 3

Payers: Insurers are under pressure to comply with tighter timelines and transparency requirements. This means investing in new technologies and workflows, which is not affordable. However, for payers who get it right, there’s a significant opportunity to improve relationships with providers and patients.2

Patients: At the end of the day, these changes are supposed to benefit patients the most. In theory, faster approvals mean quicker access to care, but during the transition, there’s a risk of gaps in care as providers and payers iron out the kinks in their systems. Unfortunately, Stories of patients waiting weeks for life-saving treatments still aren’t uncommon, highlighting how much work still needs to be done.2

Challenges and Obstacles

Even with efficient processes, the reality is that change takes time. During the rollout of ePA systems, many providers found themselves dealing with software glitches and inconsistent payer responses. Patients, unfortunately, bear the brunt end of these delays. For someone with a chronic condition or a time-sensitive diagnosis, even a few days’ delay can have serious consequences.2

While ePA (Electronic Prior Authorization) systems are meant to reduce paperwork, they come with their own learning curves. Providers need to train staff, update workflows, and troubleshoot technical issues, all of which take time away from patient care. Pharma companies, meanwhile, face added difficulty in aligning their market access strategies with a rapidly changing regulatory setting.2

How Pharma Can Adapt Strategies

Pharma companies need to stay adaptable to thrive in this new environment. One way they can do this is by using tools like ReimbursementAI, a platform designed to analyze payer data and predict authorization trends. ReimbursementAI can help Pharma identify potential roadblocks before they happen, making it easier to adapt to strategies on the fly. For example, if a particular therapy is frequently flagged for PA, Pharma can preemptively provide educational materials or support to providers to smooth the process.4

Education is another crucial area. By partnering with providers, Pharma can offer training sessions and resources on navigating the latest PA requirements. This not only strengthens relationships but also ensures that providers feel supported during the transition.

Collaboration is key. Pharma companies need to work closely with payers and providers to identify and address common challenges. This could involve co-developing solutions or advocating for policy changes that benefit all parties.

Future Predictions

Looking ahead, the regulatory industry is likely to continue evolving. One major trend is the increasing use of AI-driven solutions to handle PA processes. These tools have the potential to effectively reduce approval times by automating repetitive tasks and flagging potential issues before they escalate.

Stricter timelines for payer responses are also on the horizon. As more states adopt regulations requiring faster approvals, payers will have no choice but to invest in technologies and processes that can meet these demands.

Another area to watch is interoperability. As healthcare systems become more interconnected, there will be greater emphasis on data-sharing standards to ensure that PA systems can communicate seamlessly with electronic health records and other tools.1

One way Pharma can stay ahead is by investing in expertise. The Prior Authorization Certified Specialist (PACS) certification provides professionals with skills to navigate complex PA regulations effectively. By using PACS-certified approaches, Pharma teams can ensure they’re not just reacting to changes but proactively shaping their strategies.5

Conclusion

The healthcare industry is at a turning point, and prior authorization reforms are a big part of shaping its future. The path forward won’t be easy, but the potential rewards of quicker care and better outcomes are worth the effort. For Pharma companies, staying ahead means utilizing tools like ReimbursementAI and pursuing certifications like PACS to keep up with these changes.

Looking ahead, one thing stands out: Collaboration is going to be crucial. When Pharma, providers, and payers work together, we can build a system that truly prioritizes patients because at the core of every regulatory change is a simple but powerful goal to make healthcare better for everyone.

Resources

1. Becerra X. Medicare and Medicaid Programs; Patient Protection and Affordable Care Act; Advancing Interoperability and Improving Prior Authorization Processes for Medicare Advantage Organizations, Medicaid Managed Care Plans, State Medicaid Agencies, Children’s Health Insurance Program (CHIP) Agencies and CHIP Managed Care Entities, Issuers of Qualified Health Plans on the Federally-Facilitated Exchanges, Merit-Based Incentive Payment System (MIPS) Eligible Clinicians, and Eligible Hospitals and Critical Access Hospitals in the Medicare Promoting Interoperability Program. https://www.cms.gov/files/document/cms-0057-f.pdf. pp 41-78.
2. Albert Henry T. Prior authorization delays care—and increases health care costs. American Medical Association. Published August 12, 2024. https://www.ama-assn.org/practice-management/prior-authorization/prior-authorization-delays-care-and-increases-health-care
3. ‌Berg S. What doctors wish patients knew about prior authorization. American Medical Association. Published September 11, 2023. https://www.ama-assn.org/practice-management/prior-authorization/what-doctors-wish-patients-knew-about-prior-authorization
4. ‌ACMA. Field Reimbursement & Prior Auth AI. Reimbursementai.org. Published 2025. Accessed January 22, 2025. https://reimbursementai.org/
5. The. Prior Authorization Certified Specialist Program (PACS). Prior Authorization Training. Published 2018. Accessed January 22, 2025. https://www.priorauthtraining.org/?utm_source=google&utm_medium=cpc&utm_campaign=21070863817&utm_content=162527239634&utm_term=prior%20authorization%20specialist&gad_source=1&gclid=CjwKCAiA7Y28BhAnEiwAAdOJUL7x2_k20LSltUDYUJmmsl8uCoeSqpS1S4XFFCek3Ud0HzFHGo5toRoCstAQAvD_BwE