On Wednesday, US President Joe Biden’s administration adopted a rule mandating health insurers to set time objectives for the prior authorization procedure for individuals seeking clearance for medical treatments through government-backed insurance plans.
The Centers for Medicare & Medicaid Services (CMS), a subsidiary of the Department of Health and Human Services, stated that the rule will go into effect mostly in 2026.
The rule applies to health insurance businesses that offer government-backed insurance programs such as Medicare for those 65 and older and Medicaid for low-income people.
In recent years, some medical organizations have criticized the use of prior authorizations, claiming that it adds to doctors’ paperwork and, in certain situations, leads to limiting coverage.
“When a doctor says a patient needs a procedure, it is essential that it happens in a timely manner,” Health and Human Services Secretary Xavier Becerra said. “Too many Americans are left in limbo, waiting for approval from their insurance company.”
According to the new rule, prior permission decisions must be issued within 72 hours for urgent requests and seven calendar days for regular non-urgent requests.
According to the CMS, the revised timetable for routine requests reduces decision time for certain insurers by half.
It also requires all payers to provide a clear rationale for declining a prior authorization request, which will aid in resubmitting the request or filing an appeal if necessary.
Last year, both UnitedHealth Group’s insurance unit and health insurer Cigna announced plans to reduce the usage of prior authorization.