Quarterly Authorizations Changes Occurring in US Healthcare

Each quarter, PCG Software publishes a focused executive summary of the most impactful prior authorization (PA) changes affecting U.S. healthcare. These updates highlight regulatory actions, CMS guidance, enforcement trends, and operational shifts that materially impact authorization accuracy, turnaround times, denial risk, and compliance exposure for payer organizations.

This article is intentionally structured as a quarter-by-quarter reference, allowing payer leadership to track how authorization rules, enforcement priorities, and AI usage evolve over time. Full operational guidance, claim and authorization examples, and payer-specific workflows are available through PCG’s Virtual Examiner® and authorization solutions. Click here for more details on Virtual Examiner (VE).

The Cost and Delays with Prior Authorization Denials

Prior authorization (PA) remains one of the most time-intensive and costly processes in U.S. healthcare, particularly for Medicare and Medicare Advantage providers. Across all payer types, providers submit hundreds of millions of PA requests annually—CMS alone receives over 35 million from Medicare Advantage organizations each year. Click the boxes below to expand the statistics on how prior authorizations continue to grow in quantity, complexity, denials, and more.

Q4 Prior Authorization Changes

Phased Roll-Out of ASC PA Demo

In late Q4, CMS delayed and staggered the start of the new ASC prior authorization demonstration. Instead of all ten states starting in December, Phase 1 will begin Jan 19, 2026 for providers in CA, FL, TN, PA, MD, GA, and NY (with PA requests accepted starting Jan 5). Phase 2 will begin Feb 16, 2026, for TX, AZ, and OH (requests from Feb 2). This revised schedule gives affected ASCs additional lead time to prepare.

Affects: Medicare FFS ASC providers in demo states (timeline adjustment).

Impact: Slight operational relief – providers in Phase 2 states gained a two-month extension. All stakeholders get more time for training, updating EHR order workflows, and patient scheduling coordination under the new PA requirement. CMS likely made this change to ensure a smoother implementation after feedback. Providers should use the extra time to familiarize staff with the PA process and CMS’s demo Operational Guide and FAQ resources.

AMA House of Delegates Tackles PA Burdens

At its 2025 Interim Meeting, the AMA adopted several policy resolutions pressing for major prior authorization reforms. Physicians called on the AMA to advocate that “low-cost, noninvasive procedures” not require PA when they meet standard Medicare coverage criteria, expanding on the AMA's existing policy that such services should be exempt. Another resolution challenges the expiration time limits imposed on PAs – AMA will push state legislatures and federal regulators to ban PA durations shorter than one year for ongoing care, so patients aren’t forced into unnecessary re-authorization mid-treatment. The delegates also endorsed efforts to boost PA transparency: CMS has mandated that MA plans publicly report PA statistics (approval, denial, and overturn rates, etc.), and AMA wants to build on this by developing public “scorecards” for all payers. The AMA will work with state medical societies to require timely, non-aggregated reporting of each plan’s PA performance and will collaborate on publishing comparative PA report cards. Additionally, the AMA vowed to support investigations into how payers may profit from excessive PAs that delay care – highlighting potential financial incentives behind PA-related denials.

Affects: All insurers (Medicare Advantage, Medicaid, and commercial) via advocacy pressure; not a legal change, but a strong signal.

Impact: These policy actions indicate physicians’ top pain points (PA overuse, bureaucratic delays) and will likely spur continued regulatory and legislative proposals. Providers can cite this AMA stance when engaging with policymakers or payers. If successful, such reforms could eventually reduce PA volume, extend authorization validity, and increase transparency into compliance – all of which would improve providers’ workflows and reduce long-term denial risks.

Q3 Prior Authorization Changes

New Pilot for ASC Prior Auth

CMS shortened the standard review timeframe for prior authorizations in Medicare Fee-for-Service programs. For hospital outpatient department services and certain DMEPOS items, the decision deadline dropped from 10 business days to 7 calendar days for requests submitted on or after Jan. 1, 2025. (Expedited requests remain 2 business days.) In the RSNAT ambulance transport PA model, CMS eliminated the expedited review option effective Jan. 9, 2025, since these non-emergent cases don’t meet urgent criteria.

Affects: Medicare FFS providers using these PA programs.

Impact: Shorter wait times for PA decisions (improving turnaround time), with MACs accelerating their review processes. Providers should be prepared for quicker responses and ensure complete documentation upfront to avoid delays.

Industry Pledge to Streamline Prior Auths

CMS unveiled a 5-year demonstration requiring prior authorization for specific outpatient surgical procedures when performed in Ambulatory Surgical Centers. Slated to begin December 15, 2025, the demo targets the same service categories that already require PA in hospital outpatient settings – e.g., blepharoplasty, botulinum toxin injections, panniculectomy, rhinoplasty, and vein ablation. Ten states were chosen (CA, FL, TX, AZ, OH, TN, PA, MD, GA, NY), with providers able to start submitting PA requests by Dec 1 for procedures on or after Dec 15. Participation is voluntary, meaning that if an ASC skips the PA, its claim will be subject to a 100% pre-payment medical review (similar to the existing hospital OPD PA program).

Affects: Medicare FFS providers in ASCs in the demo states.

Impact: Adds a new operational step for ASC practices: they must obtain prior approval for these select surgeries or face claim reviews (which could delay payment or result in denial if the criteria aren’t met). Providers will need to integrate PA submission into their scheduling workflow for these procedures and ensure documentation supports Medicare’s medical-necessity rules (note: the demo does not change any coverage criteria; it just enforces them earlier in the process). The anticipated benefit is fewer downstream claim denials and appeals, since compliance is checked before the service.

New Prior Auth Demo in FFS Medicare

CMS announced the Wasteful and Inappropriate Service Reduction (WISeR) Model, an Innovation Center pilot to test tech-enabled prior authorization in Original Medicare. This model (launching Jan. 1, 2026) will use third-party contractors and AI-assisted review to streamline PA for certain services prone to high improper utilization – for example, skin/tissue grafts, neurostimulator implants, knee arthroscopy for osteoarthritis, etc. Providers in selected regions can opt to submit PAs for these services; those who don’t will have their claims go through pre-payment medical review. Notably, licensed clinicians will make final determinations on any PA denials (AI will support but not replace human review). CMS may also introduce a “gold card” feature that allows providers with strong compliance to bypass PA in the future.

Affects: Medicare FFS providers in the model’s target states (to be assigned).

Impact: Could expedite PA decisions for high-risk services (leveraging technology to improve turnaround), but adds new compliance steps for affected providers. Practices may need to adjust workflows to submit electronic PA requests to WISeR contractors and ensure documentation is complete upfront. The model’s goal is to reduce unnecessary or low-value services while maintaining timely access to necessary care.

Q2 2025 Prior Authorization Changes

Medicare Advantage Rules & Industry Reforms

MA Final Rule (CY 2026) – PA Approvals Must Be Honored: In a final rule issued April 4, 2025, CMS strengthened protections around MA prior authorizations. If an MA plan approves an inpatient admission, it cannot later overturn or revoke that prior authorization approval except in cases of fraud or obvious error. This prevents retroactive denials of payment for care that had been authorized. The same rule package also tightened appeals and notification requirements: any plan denial made during ongoing care now counts as an “organization determination” (ensuring the enrollee’s full appeal rights), and plans must send denial notices to providers as well as patients for requests submitted on a patient’s behalf

Affects: Medicare Advantage organizations and providers.

Impact: Reduces denial risk for providers (plans must stand by approved PAs) and expands transparency – providers get timely notice of MA coverage decisions and can initiate appeals. MA plans will need to update their UM policies and train staff to comply with these stricter rules.

Industry Pledge to Streamline Prior Auths

HHS–AHIP Industry Pledge to Streamline Prior Auth (June 23, 2025): HHS Secretary RFK Jr. and CMS Administrator Dr. Oz secured a voluntary commitment from major health insurers (AHIP and leading MA/commercial plans) to cut PA red tape and delays. Six key reforms are pledged: (1) implement standardized electronic PA via FHIR-based APIs, (2) reduce the volume of services requiring PA by 1/1/2026, (3) honor any existing authorizations for at least 90 days when patients switch insurers (to ensure continuity of care), (4) improve transparency and provider communication about PA decisions and appeals, (5) expand real-time approvals to minimize delays (with most requests auto-approved by 2027), and (6) ensure clinical staff (physicians or pharmacists) review all PA denials.

Affects: Medicare Advantage and other health plans (nearly 8 in 10 Americans’ coverage) via voluntary changes.

Impact: Potentially fewer PA requirements and faster determinations for providers. Insurers will likely need to update their IT systems (for FHIR ePA standards by 2027) and adjust PA criteria to drop low-value PAs by 2026. CMS has indicated it will monitor progress and could regulate if these commitments aren’t met.

New Prior Auth Demo in FFS Medicare

CMS announced the Wasteful and Inappropriate Service Reduction (WISeR) Model, an Innovation Center pilot to test tech-enabled prior authorization in Original Medicare. This model (launching Jan. 1, 2026) will use third-party contractors and AI-assisted review to streamline PA for certain services prone to high improper utilization – for example, skin/tissue grafts, neurostimulator implants, knee arthroscopy for osteoarthritis, etc. Providers in selected regions can opt to submit PAs for these services; those who don’t will have their claims go through pre-payment medical review. Notably, licensed clinicians will make final determinations on any PA denials (AI will support but not replace human review). CMS may also introduce a “gold card” feature that allows providers with strong compliance to bypass PA in the future.

Affects: Medicare FFS providers in the model’s target states (to be assigned).

Impact: Could expedite PA decisions for high-risk services (leveraging technology to improve turnaround), but adds new compliance steps for affected providers. Practices may need to adjust workflows to submit electronic PA requests to WISeR contractors and ensure documentation is complete upfront. The model’s goal is to reduce unnecessary or low-value services while maintaining timely access to necessary care.

Q1 2025 Prior Authorization Changes

Faster Turnaround for Medicare FFS Prior Auth:

CMS shortened the standard review timeframe for prior authorizations in Medicare Fee-for-Service programs. For hospital outpatient department services and certain DMEPOS items, the decision deadline dropped from 10 business days to 7 calendar days for requests submitted on or after Jan. 1, 2025. (Expedited requests remain 2 business days.) In the RSNAT ambulance transport PA model, CMS eliminated the expedited review option effective Jan. 9, 2025, since these non-emergent cases don’t meet urgent criteria.

Affects: Medicare FFS providers using these PA programs.

Impact: Shorter wait times for PA decisions (improving turnaround time), with MACs accelerating their review processes. Providers should be prepared for quicker responses and ensure complete documentation upfront to avoid delays.

Final Thoughts: Turning Prior Authorization Challenges into Operational Advantages

Prior authorization is no longer just a policy issue—it’s an operational imperative. As CMS, AMA, and major health plans continue to evolve PA policies, payer organizations must respond with precision, speed, and scalable enforcement tools. Each quarterly shift brings new risks, from shortened turnaround times to expanded documentation requirements, and the only sustainable response is automation powered by compliance logic.

This living resource is updated quarterly to help payer teams stay informed, aligned, and audit-ready. For full access to all operational scenarios, PA edit rules, denial examples, and technology guidance, consider enrolling as a PCG Virtual Examiner® client. VE integrates all quarterly changes directly into your adjudication workflows—before claims are paid—minimizing denial risk and maximizing regulatory alignment.

Click here to learn how Virtual Examiner®'s real-time Authorizations prgrams (VEWS) transforms prior authorization from a pain point into a performance edge.