What is prior authorization, and how is it changing?

Short answer: Prior authorization is when your plan must approve a service or drug before it will pay. It’s used to control cost and confirm medical necessity, but it can delay care. In 2025–2026 the rules are tightening: CMS added Medicare Advantage guardrails, about 60 insurers pledged to cut it, and Texas limits AI-only denials and “gold cards” reliable providers out of it.

Prior authorization (also called preauthorization or precertification) is a utilization-review process: for certain services or drugs, the plan must approve the request before it will pay. Plans use it to manage cost and clinical appropriateness, but it’s a frequent source of care delays and denials.

If a prior authorization is denied, you have appeal rights: an internal appeal with the plan and, under the ACA, an independent external review.

Several 2025–2026 developments are reshaping it:

  • Medicare Advantage guardrails (CMS): PA may be used only to confirm diagnosis or medical necessity, must follow traditional-Medicare coverage criteria, and an approval must remain valid for the course of treatment.
  • Industry pledge (June 2025): roughly 60 insurers covering ~270 million people voluntarily agreed to reduce the services that require PA and to honor a prior plan’s authorization for 90 days after a person switches plans.
  • Texas: SB 815 (effective 9/1/2025) bars AI or algorithms as the sole basis for a medical-necessity denial, and Texas “gold cards” exempt a provider from PA for a service after a strong approval track record.

The data shows why this matters: of Medicare Advantage prior-authorization denials, only a small share are appealed, but a large majority of those appeals are overturned, so it often pays to challenge a denial.

Sources

  • ACA prior-authorization and appeal rules: 45 CFR §147.136; ERISA 29 CFR §2560.503-1.
  • CMS Interoperability and Prior Authorization final rule (CMS-0057-F); Medicare Advantage rule (CMS-4201-F); Texas SB 815 and gold-card law (Tex. Ins. Code ch. 4201). Burden data: KFF (2026).

Content history
Originally published: June 16, 2026
Last reviewed: June 16, 2026

Plans & Coverage