The Centers for Medicare and Medicaid Services (CMS) has proposed a significant expansion of its prior authorization framework. For the first time, the agency wants to bring prescription drugs under the same interoperability rules that currently govern medical items and services. This move signals a major shift in how payers, providers, and patients will interact around drug approvals going forward.
Released on April 10, 2026, the proposed rule — formally known as CMS-0062-P — builds directly on the 2024 Interoperability and Prior Authorization Final Rule. Moreover, it introduces shorter decision deadlines, new pharmacy data standards, and broader public reporting obligations. Together, these changes aim to streamline drug authorization and reduce administrative delays that have long frustrated providers and patients alike.
What Is the New CMS Proposed Rule?
Background and Scope
The 2024 Interoperability and Prior Authorization Final Rule 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. However, drugs were left out of that earlier framework.
The new 2026 proposed rule fills that gap. It extends many of the existing API requirements to cover drugs and, additionally, adds small group market insurers on the ACA small business exchange (FF-SHOP) as newly covered organizations. This is a notable expansion that brings more payers into the interoperability ecosystem.
Which Payers and Plans Are Affected?
Expanded Coverage Across Federal Programs
The proposed rule targets a broad range of payer types. Specifically, it applies to:
- Medicare Advantage plans
- State Medicaid and CHIP fee-for-service programs
- Medicaid and CHIP managed care plans
- Qualified Health Plan (QHP) issuers on federally facilitated exchanges
- Small group market QHP issuers on the FF-SHOP (newly added)
This wider net ensures that drug prior authorization reform reaches patients across nearly all federally regulated insurance markets. Consequently, millions of Americans could benefit from faster and more transparent drug coverage decisions.
New Pharmacy Data Standards for Drug Coverage
Three Key Standards Proposed for October 2027
For drugs covered under a pharmacy benefit, CMS proposes that Medicaid/CHIP fee-for-service programs, Medicaid/CHIP managed care plans, and ACA plans support three National Council for Prescription Drug Programs (NCPDP) standards by October 1, 2027. These are:
- SCRIPT Standard — for electronic prior authorization requests and decisions
- Formulary and Benefit (F&B) Standard — to query formulary information
- Real-Time Prescription Benefit (RTPB) Standard — to check real-time drug coverage
Together, these three standards allow providers to access formulary data, confirm real-time coverage status, and submit authorization requests electronically. This aligns pharmacy benefit drug authorizations with existing requirements for Medicare Part D sponsors — creating a more unified system across the board.
Faster Decision Timeframes for Prior Authorization
Tighter Deadlines for Payers
One of the most impactful aspects of the proposed rule is its push for shorter decision turnaround times. Currently, prior authorization decisions for drugs can take days — sometimes longer — creating delays in patient care. The new proposal addresses this directly.
Under the rule, state Medicaid and CHIP managed care plans would need to decide within:
- 24 hours for standard drug prior authorization requests
- 72 hours for expedited requests (matching the timeframe for medical items and services)
ACA plans would face similar requirements:
- 72 hours for standard requests
- 24 hours for expedited requests
Furthermore, payers would be required to provide providers with a specific reason when denying a drug prior authorization request. This requirement promotes transparency and helps providers appeal decisions more effectively.
Expanded Public Reporting Requirements
Annual Drug Prior Auth Metrics
The proposed rule also strengthens public accountability. Payers would be required to annually report prior authorization metrics specifically for drugs. Reporting on 2027 data would be due in 2028.
This adds to existing public reporting requirements introduced under the 2024 rule, which currently cover non-drug services. However, an April KFF analysis of the initial data noted that the existing reports offer limited insight. Specifically, the data is aggregated across all services with no breakdown by service type — a gap the new drug-specific reporting could help address.
Additionally, payers would report API usage metrics to CMS. This lets the agency monitor adoption and performance of electronic systems across payer types.
FHIR Standards Replace Outdated Authorization Systems
Modernizing Under HIPAA
CMS is also proposing to adopt HL7 FHIR (Fast Healthcare Interoperability Resources) standards for prior authorization transactions under HIPAA. This proposal would replace the outdated X12N 278 transaction standard currently used by a minority of health plans.
The shift to FHIR-based standards would apply to all HIPAA-covered entities — including providers, health plans, and clearinghouses — that electronically exchange prior authorization requests and decisions. As a result, the new standard enables real-time electronic workflows, streamlines clinical documentation submission, and reduces administrative burden across the system.
Voluntary Industry Reductions Already Underway
Insurers Have Already Cut Prior Auth Requirements
The proposed rule arrives against a backdrop of voluntary industry action. In June 2025, nearly 50 insurers committed to voluntarily eliminating prior authorization requirements for common medical services. An April AHIP–Blue Cross Blue Shield Association survey found that, since then, insurers have eliminated 11% of prior authorization requirements overall — representing 6.5 million fewer prior authorizations. Notably, Medicare Advantage plans saw a reduction of more than 15%.
This voluntary momentum, combined with the new proposed rule, suggests a broader industry shift toward reducing authorization barriers. Still, regulatory requirements provide the enforceable backbone that voluntary commitments alone cannot guarantee.
What Comes Next?
Requests for Information and Comment Period
The proposed rule includes five requests for information (RFIs) on topics CMS is considering for future rulemaking. These cover:
- Electronic event notifications for care coordination
- Healthcare cybersecurity resiliency
- Oversight of payer API technology
- Step therapy processes
- Prior auth burden for laboratory tests and durable medical equipment
The public comment period for CMS-0062-P remains open until June 15, 2026. Healthcare stakeholders — including providers, payers, patient advocates, and health IT organizations — are encouraged to submit feedback before the deadline.
CMS has proposed compliance dates generally beginning in 2027, aiming to deliver improvements to patients as quickly as possible.
