CMS has proposed extending its prior authorization interoperability framework to cover drugs for the first time, building on its 2024 rule that focused on medical items and services. The proposed rule would also shorten decision timeframes and expand public reporting requirements.
Six things to know:
1. CMS released the 2026 Interoperability Standards and Prior Authorization for Drugs proposed rule (CMS-0062-P) on April 10. The rule builds on the 2024 Interoperability and Prior Authorization final rule, which required Medicare Advantage plans, state Medicaid and CHIP programs, Medicaid and CHIP managed care plans and ACA plans to implement interoperability APIs for non-drug items and services.
The new proposed rule would extend many of the current requirements to drugs and would also add small group market insurers on the ACA small business exchange as organizations subject to the interoperability requirements.
2. For drugs covered under a pharmacy benefit, CMS is proposing to require Medicaid/CHIP fee-for-service programs, Medicaid/CHIP managed care plans and ACA plans to support three pharmacy data standards beginning Oct. 1, 2027, which would allow providers to query formulary information, check real-time coverage and submit electronic prior auth requests and decisions for drugs.
3. The proposed rule would tighten prior auth decision timeframes for drugs. State Medicaid/CHIP managed care plans would be required to make decisions within 24 hours for standard requests or within the same timeframe as items and services, which is seven days for standard and 72 hours for expedited requests. ACA plans would be required to respond within 72 hours for standard requests and 24 hours for expedited requests. CMS is also proposing to require those payers to give providers a specific reason when denying a drug prior auth request. All of these requirements would take effect Oct. 1, 2027.
4. The proposed rule would expand public prior auth metrics reporting to include drugs for the first time. Under the 2024 rule, payers began publicly posting prior auth metrics for medical items and services this year on March 31, including approval and denial rates, appeal outcomes, and decision timeframes.
An April KFF analysis found the initial data offers limited insight, noting it is aggregated across all services with no breakdown by service type. Under the new proposal, payers would be required to annually post prior auth metrics for drugs as well, with reporting on 2027 data due in 2028.
5. The proposed rule includes five requests for information on topics CMS is considering for future rulemaking, including electronic event notifications for care coordination, healthcare cybersecurity resiliency, oversight of payer API technology, step therapy processes and prior auth burden for laboratory tests and durable medical equipment. CMS is also proposing to adopt HL7 FHIR standards for prior authorization transactions under HIPAA, which would apply to all covered entities, including providers, health plans and clearinghouses, that electronically exchange prior authorization requests and decisions.”
6. The proposed rule arrives as insurers have been voluntarily reducing prior auth requirements under commitments made in June 2025 by nearly 50 insurers. An AHIP-Blue Cross Blue Shield Association survey published in April found insurers have eliminated 11% of prior authorization requirements since June, representing 6.5 million fewer prior authorizations, including a reduction of more than 15% for Medicare Advantage plans.
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