By Neil Patil and Carrie Graham
On April 4, 2025, the Centers for Medicare & Medicaid Services (CMS) finalized the Contract Year (CY) 2026 Medicare Advantage (MA) and Part D Final Rule. While CMS’s decision not to require Medicare and Medicaid to cover GLP-1 medications for treating obesity is likely to make headlines, another important issue has gotten less attention. The final rule omitted proposals from the Biden administration to the put guardrails around the use of prior authorization in Medicare Advantage—in particular, they did not finalize rules that would have: 1) prohibited MA plans from discriminating against enrollees when using artificial intelligence (AI) to make prior authorization decisions, 2) provided more clarity on the internal rules MA plans are using to approve or deny care, and 3) required more granular reporting of each MA plan’s prior authorization approvals and denials. Since 2023, CMS has taken significant steps to improve prior authorization practices in MA, but in light of the 2026 final rule, legislation may be necessary to further strengthen prior authorization safeguards to ensure beneficiaries don’t experience delays or denials of medically necessary care.
Why this is important
Stakeholders have been eagerly awaiting the Trump administration’s CY 2026 final rule on Medicare Advantage and Part D because it provides one of the first indications of the administration’s approach to regulating the private MA industry. In the Medicare Policy Initiative’s (MPI) March 2025 fact sheet entitled, Prior Authorization in Medicare Advantage, we discussed how policymakers, federal oversight agencies, beneficiary advocates, and researchers have raised concerns that some MA plans misuse prior authorization to delay or deny medically appropriate care for Medicare beneficiaries. In January 2025 the Biden administration proposed several new safeguards and transparency measures to improve prior authorization in MA. In April, 2025, when CMS released the CY 2026 final rule, they adopted some of these changes, but did not finalize many of them. In this MPI blog, we review past regulatory actions on prior authorization, the contents of the CY 2026 final rule, and additional measures that stakeholders may want to consider to further improve guardrails for prior authorization in MA.
Regulatory Actions to Streamline Prior Authorization and Reduce Inappropriate Denials in Medicare Advantage.
In the last few years CMS finalized several regulations that address prior authorization in MA, including: requiring MA plans to cover the same services as traditional Medicare and limiting their ability to use their own internal coverage criteria to deny care— “internal coverage criteria” refers to policies, guidelines, or tools used by MA organization to determine medical necessity for covered services, beyond what is explicitly stated in Medicare law or CMS manuals. They also added continuity of care requirements to ensure that treatment is continued when an enrollee switches plans. Additionally, CMS finalized rules to speed up plan’s prior authorization decisions (within 72 hours for urgent requests) and increased transparency by requiring MA plans to 1) report their overall denial rates on their websites, 2) inform enrollees and providers of specific reasons why they denied care, 3) publicize any internal coverage criteria they use to deny care that is covered by Medicare, 4) establish a committee to review their prior authorization practices, and 5) produce a health equity report to show whether care is being denied more frequently for certain populations. All of these changes will be phased in over time.
In April 2025, CMS finalized the CY 2026 Final Rule on Medicare Advantage and Part D. There were some proposed regulations related to prior authorization that were finalized, and some that were not.
- Which prior authorization provisions were finalized? The Trump Administration finalized some Biden administration proposals, including: 1) ensuring MA appeals rules apply to any denial, regardless of whether the decision is made before, during, or after the enrollee received care, 2) clarifying that an enrollee always has the right to appeal denials that affect their ongoing course of treatment, and 3) codifying certain sub regulatory requirements.
- Which prior authorization provisions were not finalized? CMS did not finalize the Biden administration’s proposals to 1) further clarify the meaning of internal coverage criteria, 2) require annual health equity analysis be reported by each service rather than aggregated for all services, nor did they 3) finalize rules to ensure the use of AI provides equitable access to care. However, CMS did state in the final rule that the agency will continue to consider whether future rulemaking may be needed in the area of AI. This may open the door for Congress to consider several existing proposals aimed to further improve MA prior authorization practices.
Potential Next Steps to Improve Oversight and Transparency in MA use of Prior Authorization
There has been bipartisan interest in future legislative or regulatory action to ensure that Medicare beneficiaries enrolled in MA plans are not denied medically necessary care. Some proposals include:
- The Improving Seniors Timely Access to Care Act. This bipartisan, bicameral legislation is perhaps the most well-known legislative proposal related to prior authorization in MA. In September 2022, an earlier version of the bill unanimously passed the U.S. House of Representatives. Since that time, some of the provisions of this bill were finalized by CMS, but the current iteration of this bill would go further to establish new requirements, such as plan-level reporting on prior authorization metrics (see Transparency section below) and new authority for CMS to set timeframes for “real time” decisions to speed up prior authorization requests (see MPI’s tool: Comparison of CMS Rules and legislation to address Prior Authorization in MA). Back in 2022, there was concern about the bill’s price tag when the non-partisan Congressional Budget Office (CBO) estimated that it would cost approximately $16 billion over a ten-year window. Given that some of the provisions have since been finalized, the current bill would likely be scored much lower.
- The use of AI in making prior authorization decisions. As CMS noted in its CY2026 final rule, policymakers remain concerned over the ongoing use of AI in making coverage decisions. In light of recent class action lawsuits, a group of bipartisan, bicameral lawmakers sent a 2024 letter to CMS urging the agency to establish an approval process to review how AI is used in prior authorization and to prohibit its use in coverage denials until systematic reviews are completed. Another group of lawmakers recently re-introduced legislation that would require MA plans to obtain input from physicians in the MA plan’s service area for their prior authorization policies. The legislation would also require denial decisions be made by a physician, as opposed to AI or other technology.
- Transparency and reporting of prior authorization practices. Beginning in 2026, CMS will require MA organizations to report more information about their prior authorization practices, including the services that require prior authorization, and the percent of all prior authorization requests that were approved, denied, approved after appeal, and reasons for denials. This information is only required to be reported at the “contract level,” meaning a combination of several or even sometimes dozens of individual plans offered by an MA company, rather than at the “plan level” which would mean reporting these metrics for each individual MA plan. Additionally, this data will be aggregated across all services, such that beneficiaries and oversight agencies will not have assess the prior authorization and denial metrics for a specific test, treatment, nor therapy. The Improving Seniors’ Timely Access to Care Act would require plan-level reporting by individual services, which could allow beneficiaries to compare prior authorization metrics when choosing a plan. It would also require disclosures and information related to the use of AI in prior authorizations.
- Other policy proposals related to prior authorization in Medicare Advantage are available in the Medicare Policy Initiative’s Compendium on Medicare Advantage and Part D Proposals.
Although CMS has taken important steps to improve prior authorization processes and reduce inappropriate denials, more work needs to be done to ensure that MA enrollees receive timely access to appropriate care. Policymakers should consider whether requiring more granular reporting at the plan level would improve transparency and help beneficiaries make better-informed choices about their plan options. To ensure that physicians, rather than algorithms, make coverage decisions, guardrails around the use of AI might also be necessary. Finally, policymakers should closely monitor the MA landscape and determine whether additional policies to address prior authorization may be necessary. Ultimately, policymakers need to carefully consider how to find a sustainable balance between timely access to appropriate care and reducing unnecessary, duplicative, or harmful low-value care.