Emerging Legislative Reforms in Prior Authorization and Market Access Strategy

Recent years have seen a strong legislative and regulatory push to reform prior authorization processes in order to reduce delays and improve patient access. Prior authorization was originally intended to ensure medical necessity and control costs, but evidence shows it can become a barrier to care. PAs impose heavy administrative burdens: for example, physicians report dedicating enormous time and personnel to PA paperwork [1]. A recent survey of allergy/immunology specialists concluded that PAs “significantly affect patient care delivery and increase administrative burden,” in some cases even causing “serious adverse events” when needed treatments are delayed [2]. In oncology, one study found that 69% of cancer patients experienced a PA-related delay (often at least 2 weeks or longer) and 22% did not ultimately receive the recommended therapy due to PA denials or hold-ups. These delays raised patient anxiety and eroded trust in insurers and the health system [3]. In short, while PA can reduce wasteful spending and steer care to evidence-based therapies [4], it also risks “wasting financial resources and needlessly placing patients in danger” when overused [2].

The tension of balancing utilization management against timely access is driving both federal and state policymakers to enact new rules and laws.

Federal Prior Authorization Rules

At the federal level, the Centers for Medicare & Medicaid Services (CMS) has finalized comprehensive reforms to modernize the PA process. The CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F), issued in January 2024, mandates that Medicare Advantage, Medicaid/CHIP, and ACA marketplace plans implement electronic PA (ePA) systems and drastically shorten decision timelines [4][5]. Beginning in 2026, for example, payers must respond to urgent PA requests within 72 hours and to standard requests within 7 calendar days (in many cases halving previous wait times) [5]. Insurers must also provide explicit explanations for any PA denials and publicly report PA approval/denial metrics [5]. Together, these provisions require payers to build APIs and automated portals for PAs, cutting manual workload and enabling faster responses. CMS projects that these changes will yield roughly $15 billion in savings over a decade by reducing administrative waste and minimizing avoidable care delays [5].

The bottom line is that federal rules now force a more efficient, transparent PA workflow: payers must maintain automated PA systems, meet accelerated deadlines, and share data, or face compliance actions. Market access teams will need to support their organizations in implementing these changes to stay compliant, while leveraging the improvements (shorter wait times, clear denial rationales) to accelerate patient therapy starts.

State Legislative Reforms

In parallel with federal action, state legislatures have been active in PA reform. By mid-2024, dozens of states had enacted new PA laws or regulations for both public and commercial plans. Common elements of these state reforms include:

• Gold-carding high-performing providers: Providers or pharmacies with high PA approval rates are temporarily exempted from routine PAs for certain drugs or services [4].
• Mandatory ePA systems: Many states require insurers to implement automated PA portals or integration with electronic health records, replacing faxed or phone-based requests [4].
• Exceptions or exclusions: Some states exempt specified drug classes or services (e.g. HIV, oncology, emergency care) from PA requirements altogether.
• Shortened decision timelines: Payers are legally bound to make PA decisions faster than federal standards, often within 24–48 hours for urgent requests and 3–5 days for routine requests [4].
• Limits on retroactive denials: Insurers are barred from denying payment after the fact if a claim was approved through PA (or in some cases, even when it was not) [4].
• Standardized clinical criteria: States set requirements for how payers develop and document the medical-necessity criteria used in PA decisions, and often require independent peer-reviewers to match the treating physician’s specialty [4].
• Transparency requirements: Payers must publicly post their PA forms, criteria, and step-therapy protocols. Any PA denial must include a clear clinical rationale to inform appeals [4].
• Data reporting mandates: Many laws now require insurers to report PA metrics (approval/denial rates, turnaround times) to the state, enabling regulators to track improvements over time [4].

These state initiatives standardize and shorten the PA process across payers. Transparency rules mean that reimbursement teams should review published criteria regularly and align appeal documentation accordingly. In practice, the mosaic of state laws means market access and prior authorization specialists must stay aware of each jurisdiction’s rules and prepare to comply.

Impact on Providers and Patients

The cumulative effect of these reforms is to alleviate some of the burdens providers and patients face under the legacy PA system. By mandating electronic processes and tighter deadlines, the reforms aim to reduce the workload on clinics and cut weeks off approval times. However, even with reforms, the PA process still consumes significant resources. Surveys indicate that the average physician office spends dozens of staff-hours per week on PA paperwork [1]. One recent multi‐stakeholder survey found provider offices collectively spend the equivalent of over 100,000 full-time nursing hours per year just on PA activities [1]. Patients also often shoulder burdens: they may have to call pharmacies, insurers, or even take unpaid time off work to follow up on a PA. All of this support was generally needed because historically, PAs often lacked automation and transparency.

Importantly, the consequences of PA delays can be clinically significant. The aforementioned oncology study showed that nearly a quarter of cancer patients forwent recommended treatment because of PA barriers [3]. Thus, while utilization management safeguards remain important, market access professionals should treat the regulatory trend toward streamlining as a win: complying with faster PAs will minimize care disruptions. They should use this momentum to work with medical affairs and clinicians on process improvements (e.g., embedded PA liaisons, electronic solutions) that leverage new rules to truly reduce turn-around times.

Implications for Market Access and Reimbursement Strategy

These legislative reforms have broad implications for market access strategy. First, market access teams must integrate compliance into their planning. Whenever negotiating coverage or developing materials, they should incorporate up-to-date knowledge of PA rules. Providing robust clinical and pharmacoeconomic evidence up front can help ensure smoother approvals, as payers will have less room for discretionary denial.

Second, increased transparency and data reporting empower market access teams with better information. Many new laws require insurers to publish their PA criteria and report metrics like approval rates. Advanced awareness of payer policy shifts allows strategic preparation of evidence dossiers or real-world evidence summaries to present at formulary meetings or appeals.

Legislative trends favor value-based contracting and outcomes-focused negotiations. Many reforms aim to tie reimbursement to actual patient benefit. Outcomes-based agreements – where payment is linked to real-world outcomes – have become more attractive as a way to satisfy both fiscal and access goals [6]. HEOR data is now even more critical: they give market access teams leverage in negotiating such agreements or in justifying expedited access for high-value therapies. As one recent overview notes, performance-based or “value-based” contracts are gaining traction for high-cost and rare-disease therapies because they can simultaneously improve patient access and align incentives [6]. Teams should thus ensure HEOR studies (e.g., burden-of-illness analyses, budget impact models) are ready to support these discussions.

Finally, legislative updates will likely continue shaping the formulary and coverage landscape. For example, broader policies (like Medicare Part D negotiation or drug pricing reforms) may change which products are prioritized for access. The key for market access is agility: stay informed of new laws and regulations, analyze how they intersect with payer criteria (PA requirements, formulary tiering, step therapy rules), and adjust launch plans accordingly. Forecasting committees and C-suite leadership should be briefed on these trends, as they can affect budgeting (e.g., anticipating more value-based rebates) and risk-sharing arrangements.

Conclusion

In summary, recent federal and state legislative initiatives aim to streamline prior authorization and enhance transparency, directly influencing market access and reimbursement practices. By mandating faster PA decisions, standardized criteria, and robust data exchange, these reforms promise to reduce administrative waste and improve time-to-treatment. For market access professionals, the mandate is clear: adapt internal workflows (including IT systems, staff training, and appeals processes) to comply with new requirements, and leverage greater transparency to strengthen payer negotiations. Even with new legislations streamlining the process, prior auths are not going anywhere and teams (both at the provider-level and those in market access within pharma) must be equipped with the knowledge base and skillset to master these complex process.

References

1. American Medical Association. (2024). Administrative burden of prior authorization. PubMed. https://pubmed.ncbi.nlm.nih.gov/39328396
2. Shaker MS et al. (2024). Prior authorization delays in allergy/immunology: A national survey. PubMed. https://pubmed.ncbi.nlm.nih.gov/38819354
3. Banerjee S et al. (2023). Impact of prior authorization on oncology patients: A national study. JAMA Network Open / PMC. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10585404
4. Medicaid and CHIP Payment and Access Commission (MACPAC). (2024). Prior Authorization in Medicaid. https://www.macpac.gov/wp-content/uploads/2024/08/Prior-Authorization-in-Medicaid.pdf
5. Centers for Medicare & Medicaid Services (CMS). (2024). CMS finalizes rule to improve prior authorization. https://www.cms.gov/newsroom/press-releases/cms-finalizes-rule-expand-access-health-information-and-improve-prior-authorization-process
6. Arora A et al. (2024). Value-based contracting in rare disease: A real-world evidence approach. PubMed Central (PMC). https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10810314