The Prior Authorization Relief Act directs the Secretary of HHS to audit Medicare Advantage prior authorization protocols, identify high-reimbursement items and Part D drugs that meet specified clinical and administrative thresholds, and issue a federal rule standardizing prior authorization requirements (including supplemental forms) for those items across all Medicare Advantage plans. The bill also creates an exemption for providers and suppliers participating in two-sided risk payment models, while allowing MA organizations to request that the exemption not apply to their plans.
This matters because it moves prior authorization over high-cost care from a patchwork of plan-by-plan rules to a single, federal template for identified items and drugs, which could reduce administrative burden for clinicians and speed access for beneficiaries — but it also shifts important discretion away from individual plans and creates carve-outs tied to participation in value-based payment arrangements. Compliance officers, MA plan administrators, providers, and PBMs will face new rulemaking-driven deadlines and operational changes if the Secretary implements the requirements.
At a Glance
What It Does
The bill requires HHS to audit MA prior authorization practices and, based on that audit, issue a final rule to standardize prior authorization protocols (including supplemental forms) for the items/services and Part D drugs identified. It sets firm dates for the audit and final rule and limits the requirement where two-sided risk payment models are in place.
Who It Affects
All Medicare Advantage organizations (including MA–PD plans), clinicians and suppliers who request prior authorizations under MA, Part D drug prescribers and pharmacy benefit managers, and providers participating in two-sided risk models such as ACOs under section 1899.
Why It Matters
Standardization can cut redundant paperwork and reduce delays for high-cost care, but it also constrains plan-level utilization management. The carve-out for two-sided risk participants creates a direct link between payment model participation and administrative relief, which could change contracting incentives and operational priorities across the MA market.
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What This Bill Actually Does
The bill adds a new subsection to the Medicare Advantage statute that does three things in sequence. First, it requires the Secretary to audit prior authorization practices used in MA for items, services, and covered Part D drugs in order to identify a subset of items that meet three statutory criteria.
Those criteria combine a spending threshold (top 10 percent of reimbursements), a clinical-evidence requirement (enough evidence to support a standard medical policy), and an administrative-burden signal (prior authorization processes that require an excessive number of steps). The audit is the trigger for any subsequent regulatory change.
Second, once HHS has identified the target items and drugs, the agency must write a final rule to create uniform prior authorization requirements for them across all MA plans. The bill explicitly includes supplemental forms in the scope of what must be standardized, which pushes the rule toward harmonizing the information collected from clinicians as well as the decision rules.
The statutory schedule sets deadlines for the audit and the final rule, meaning implementation will follow a defined, short timetable rather than an open-ended study.Third, the statute carves out an exemption: if a provider or supplier is participating in a two-sided risk payment model — including ACOs under section 1899 or models tested under section 1115A — the standardized prior authorization requirements will not apply to items or drugs furnished by that provider. The Secretary must also create a process enabling an MA organization to ask that the exemption not apply, allowing plans to retain their prior authorization rules for a given item even when the provider qualifies for the two-sided risk carve-out.Because the bill requires rulemaking rather than prescriptive forms in the statute, the actual operational details — how HHS defines “excessive” steps, what a uniform supplemental form looks like, and how electronic transactions will be phased in — will be set in regulation.
The statute narrows the universe of affected prior authorizations to those identified in the audit, so it does not eliminate plan-level prior authorization generally; it centralizes standardization for the subset that meets the statutory thresholds.
The Five Things You Need to Know
The Secretary must complete an audit (by January 1, 2027) to identify MA items/services and covered Part D drugs that meet three criteria: top 10% in reimbursement, sufficient clinical evidence to support a standard medical policy, and prior authorization protocols that require an excessive number of steps.
Following that audit, HHS must issue a final rule (by May 1, 2028) that standardizes prior authorization requirements, including supplemental forms, for the items and drugs identified across all Medicare Advantage plans, including MA–PD plans.
The standardization requirement expressly covers supplemental forms — meaning the rule must harmonize not only decision rules but the documentation MA plans collect from providers.
Providers and suppliers participating in two-sided risk models (e.g.
ACOs under section 1899 or models under section 1115A) are exempt from the standardized prior authorization requirements for items and drugs they furnish or prescribe.
The Secretary must establish a process that lets an MA organization request that the exemption not apply, so a plan can choose to continue applying its own prior authorization rules for exempted items or providers.
Section-by-Section Breakdown
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Mandatory audit to identify target items and drugs
This subsection requires HHS to perform a discrete audit to find which items, services, and Part D drugs should be subject to federal standardization. The bill sets three statutory filters—spending (top 10% of reimbursements), clinical-evidence sufficiency, and administrative burden (excessive steps)—so the audit is both cost- and burden-focused. Practically, HHS will need to pull utilization and reimbursement data across MA plans, evaluate the evidence base for clinical policies, and develop a methodology to quantify what counts as an “excessive number of steps,” which will materially affect which items become subject to standardization.
Rulemaking to standardize prior authorization protocols and forms
After the audit, the Secretary must promulgate a final rule standardizing prior authorization requirements for the identified items and drugs across all MA plans, explicitly including supplemental forms. This forces a federal template where previously each MA organization could set its own prior authorization pathway. For compliance teams and IT vendors, this translates into new required workflows and data fields, and it gives HHS the levers to require consistent documentation and potentially electronic prior authorization standards in the implementing regulation.
Exemption for two-sided risk participants
The statute exempts providers and suppliers that participate in two-sided risk payment models (models under section 1115A or arrangements such as ACOs under section 1899) from the standardized prior authorization requirements for items they furnish or drugs they prescribe. Conceptually, the bill treats participation in a downside-risk arrangement as a substitute for plan-level utilization controls, on the expectation that financial accountability will restrain inappropriate use without prior authorization.
MA organization opt-out process
Recognizing that plans may wish to retain prior authorization even for exempt providers, the Secretary must set up a process allowing an MA organization to request that the exemption not apply for items, services, or covered Part D drugs under its plan. This creates a mechanism for plans to preserve utilization management where they judge it necessary, and it also adds an administrative step — plans must decide whether to invoke the opt-out and document that decision under HHS procedures.
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Who Benefits
- Medicare Advantage enrollees who need high-cost items or Part D drugs — by narrowing prior authorization variability and standardizing forms, the bill aims to reduce delays and administrative denials for identified items.
- Clinicians and practice staff who submit prior authorizations — a standardized set of forms and decision rules for the targeted items can reduce duplicate requests and shorten turnaround time for those specific services and drugs.
- Providers in two-sided risk models (ACOs and other downside-risk arrangements) — the exemption removes a layer of prior authorization for qualifying services, smoothing care delivery and aligning administrative burden with at-risk payment relationships.
- Health IT vendors and standards groups working on electronic prior authorization — the statute’s focus on standard supplemental forms creates demand for interoperable, standardized ePA solutions tied to the federal rule.
Who Bears the Cost
- Medicare Advantage organizations and plan operations teams — must adapt systems to the federal standard, update prior authorization logic and forms, and potentially lose discretionary utilization controls for standardized items unless they use the opt-out process.
- Pharmacy benefit managers and Part D administrators — will need to align Part D prior authorization workflows to the federal standard for identified drugs, which may require system changes and renegotiation of operational processes.
- CMS/HHS (agency resources) — must execute a data-intensive audit, develop regulatory standards, manage an opt-out process, and oversee implementation, creating administrative and program integrity demands on the agency.
- Clinicians and suppliers not in two-sided risk models whose local utilization management practices are tightly tailored — they may find the standardized rules less flexible than plan-specific protocols they previously adapted to local practice patterns.
Key Issues
The Core Tension
The bill tries to reconcile two legitimate goals—cutting needless administrative burden and preserving plan-level tools to control inappropriate utilization—by standardizing prior authorization only for items that meet defined thresholds while exempting providers in downside-risk models; the tension is that any move to simplify authorization risks weakening utilization controls and increasing spending, yet strict controls perpetuate the very administrative friction the bill seeks to remove.
The statute leaves key definitional and operational questions to HHS rulemaking: how to measure an “excessive number of steps,” how to determine when clinical evidence is “sufficient” for a standard medical policy, and what specific elements a standardized supplemental form must include. Those choices will determine whether the policy meaningfully reduces burden or simply shifts it into a different format.
The audit’s spending threshold (top 10% of reimbursements) is a blunt instrument that may sweep together clinically heterogeneous items — high-cost drugs, infusions, and complex procedures — requiring nuanced rulemaking to avoid one-size-fits-all standards that do not fit clinical realities.
The exemption for two-sided risk participants introduces implementation and incentive issues. On the one hand, it rewards providers who accept downside risk by reducing administrative friction.
On the other hand, it creates a differential administrative landscape that may encourage plans and providers to structure relationships to capture or avoid exemptions. Allowing plans to request that the exemption not apply mitigates some concerns but also adds another administrative approval step and potentially uneven application across plans and regions.
Finally, the bill is silent on enforcement mechanisms, appeals processes, and interactions with existing electronic prior authorization standards and state laws, so much will turn on the forthcoming regulation and HHS’s operational choices.
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