As Prior Authorization Goes Electronic, Offices Still Need to Hear About Rejections
A proposed federal rule would speed drug prior authorization once a request is filed. Offices still need to hear about pharmacy rejections when they happen.
Jordan’s new prescription reaches the pharmacy on a Monday, and the claim comes back from the plan: prior authorization required. The pharmacist tells Jordan the doctor’s office will need to send one in, and Jordan goes home assuming the office has been told. The following week Jordan calls to ask what is happening, and that is when the prior authorization coordinator starts the request.
Under the proposed federal rule on drug prior authorization, an exchange plan would owe the office an answer within 72 hours. Medicaid already owes one within 24 hours and Medicare drug plans within 72 hours. Each of those clocks starts when the coordinator files.
What CMS has proposed and where it stands
On April 10, 2026, the Centers for Medicare & Medicaid Services (CMS) proposed a rule that would bring prior authorization for drugs into the electronic process it already requires for medical services.[1] Comments closed on June 15. As of mid-October, CMS has not issued a final rule; and the final version could differ from the proposal. As proposed, most of it would apply from October 1, 2027, so nothing changes for most of 2027 either way.
If it is finalized as proposed, here is what changes
The rule would apply to Medicaid, the Children’s Health Insurance Program (CHIP), and individual and small-group plans sold on the federally facilitated health insurance exchanges for drugs on both the pharmacy and the medical benefit. In Medicare Advantage, it would add drugs on the medical benefit. The pharmacy side already falls under Part D rules, which require electronic prior authorization and a benefit check at prescribing and which move that check to a newer standard in January 2027.
The rule’s drug requirements would not apply to employer plans, including self-funded plans governed by the Employee Retirement Income Security Act (ERISA), to state-run exchanges, or to traditional Medicare.[1]
Covered plans would accept drug prior authorization requests electronically from the prescriber’s own software. Medicaid, CHIP, and exchange plans would give a specific reason when they deny a drug request and would support a benefit check at prescribing, which shows the prescriber the patient’s coverage, restrictions, covered alternatives, and estimated cost before the prescription is sent. Exchange plans would decide within 72 hours of receiving a standard request and 24 hours for an expedited one, and CHIP fee-for-service programs within 24 hours. Medicare Advantage and Medicaid keep the deadlines they already have.[1,2] Plans would publish figures on their drug prior authorization decisions starting in 2028.[1]
For a brand on the pharmacy benefit, the change is concentrated in Medicaid and the federally facilitated exchange plans. In a JAMA study published in July, Medicaid managed care and exchange plans had the highest first-fill formulary rejection rates, at 49.8% and 48.7%, respectively.[3] A brand with heavy exchange volume and mostly prior authorization rejections could see faster decisions once requests are filed. In Medicaid, which keeps its existing deadline, the change is in how requests are sent and how denials are explained. Employer plans are outside the rule. If the benefit check works as intended, some prior authorization requirements will be caught before the prescription is sent, which is good for brands and patients.
What electronic prior authorization does in practice
Electronic prior authorization moves the request from fax and phone into the prescriber’s own software, and for offices, much of that is welcome. In a late 2024 survey, health plans reported that 47% of requests for prescription drugs were still submitted manually.[4] Some pharmacy benefit managers (PBMs) now approve automatically the requests that meet the criteria. Optum Rx says the rest are “sent to the provider to enter manually.”[5]
Much of the work in a request is finding each plan’s requirements and documenting against them. In a survey of 1147 providers, those using electronic prior authorization reported a shorter time to a decision, though the time from starting a submission to finishing it did not differ, and they did not report spending less time preparing requests. Providers in the same survey said they still lack ready access to each plan’s current criteria and documentation requirements.[6] The PBMs’ trade group made a related point to state insurance regulators on October 5: “Criteria do not change on an electronic channel.”[7]
The rule’s other tool is the benefit check at prescribing: a screen in the prescriber’s software that shows coverage, restrictions, and the patient’s cost before the prescription is sent. So far, it has been studied mostly as a way to lower what the patient and the plan pay. In one large health system, clinicians acted on 11% of its suggestions, and most of those changes switched the pharmacy; that study did not look at prior authorization.[8]
The rule, like the electronic tools it builds on, aims at catching the requirement before the prescription is sent. CMS’s diagram of the proposed workflow begins with the prescriber checking the benefit and starting the request, and it has no step for a prescription the plan has already rejected at the pharmacy.[9]
A rejection at the pharmacy is not a request
When the plan rejects a claim, the reason goes to the pharmacy. The pharmacy may call or fax the office, or the patient may call; but the proposal does not set how or when the office hears. In the proposal, CMS summarizes what commenters told the agency: “Providers are sometimes unaware that a prior authorization is required until a payer rejects a prescription claim presented to a pharmacy.”[1] In a 2019 industry survey of 400 providers, 60% said their practice completes prior authorizations after the pharmacy has notified them, 20% after the patient has, and 17% at the point of prescribing.[10]
Medicare drug plans have had decision deadlines for years and now require electronic requests and a benefit check at prescribing. In the JAMA study, about one first fill in five was still rejected for a formulary reason in those plans: 24.0% in stand-alone Medicare drug plans and 19.8% in Medicare Advantage drug plans.[3]
Prior authorization is also only part of what happens at the pharmacy. The JAMA study followed first fills of single-source brand drugs from 2018 to September 2024. The share rejected on the first try for a formulary reason rose from 24.3% in 2018 to 40.7% in 2024. Across the period, 14.8% of first fills were rejected because the plan excluded the drug from its formulary and 17.2% because the plan required prior authorization or step therapy. An exclusion calls for an exception request, which the office can file only once it knows the prescription was rejected. Nearly half of rejected first fills (48.4%) were followed by no fill in the same therapeutic class within 90 days.[3]
Some prescriptions are approved and paid and then never picked up; a cost estimate at prescribing may help with some of those. In the prescription journey audits we run for brands, prior authorization sits alongside benefit exclusions, missing diagnosis codes, and prescriptions never picked up as reasons patients do not receive the brand.
If the rule is finalized, it will help with part of this, mostly in Medicaid and exchange plans. The rest is not going away.
What to watch in 2027
A brand that knows its rejections by reason and by plan type can see how much of the problem the rule could reach: prior authorization rejections in the plans it covers. Exclusions, rejections in plans outside the rule, and most prescriptions never picked up will continue as they do now.
The other question is how offices hear about each kind of rejection today. A prior authorization rejection can reach the office as a request the pharmacy starts in the office’s electronic prior authorization software. An exclusion or a diagnosis code problem can reach it by fax, by a call from the patient, or not until the next visit.
The last question is how the office will hear about the rejections no one has filed a request for. An office that gets the reason and the brand’s resource when the rejection happens can fix the routine problems that keep a prescription stuck, such as a missing diagnosis code or an incomplete request, with the patient’s chart at hand; and the brand’s hub and field reimbursement managers can focus on the cases that need them.
Whatever form the final rule takes, ReCaptRx acts when a rejection happens and helps the office prevent the next one. When a prescription for the brand is rejected at the pharmacy—for reasons such as a missing or incomplete prior authorization, a benefit exclusion, or a missing or mismatched diagnosis code—or is paid but never picked up, the platform sends a notification to the prescriber’s office when it happens. The office does not log in to anything to receive it. The notification arrives through the channels the office already uses and carries the reason and the brand’s own support resource, such as a prior authorization checklist or an enrollment link. When the reason is a prior authorization, the office files the request in the electronic prior authorization tools it already uses—and the plan’s decision clock starts.
Each notification carries the reason the plan gave, so the office learns what that plan requires for the next prescription. Across our programs, prior authorization rejection rates have fallen by about a third on average. In one Aventria Health Group case study, a client’s dispense rate (the share of patients prescribed the brand who had it dispensed) went from 57% before the platform to 78% in the first month and reached 84% at its highest.
References
Centers for Medicare & Medicaid Services. Medicare and Medicaid programs; Patient Protection and Affordable Care Act; interoperability standards and prior authorization for drugs (CMS-0062-P). Proposed rule. Fed Regist. 2026;91(71):19890-20060. April 14, 2026. Accessed October 13, 2026. https://www.govinfo.gov/content/pkg/FR-2026-04-14/pdf/2026-07205.pdf
Payment for covered outpatient drugs, 42 USC § 1396r-8. Legal Information Institute. Accessed October 13, 2026. https://www.law.cornell.edu/uscode/text/42/1396r-8
Levy JF, Alexander GC, Vabson B, Ippolito BN. Formulary-related insurance denials of single-source branded drugs in the United States. JAMA. 2026;336(8):664-672. doi:10.1001/jama.2026.8702
AHIP. Improving prior authorization for patients and providers. June 2025. Accessed October 13, 2026. https://ahiporg-production.s3.amazonaws.com/documents/202506_AHIP_Report_Prior_Authorization-final.pdf
Optum Rx. Optum Rx continues to improve the pharmacy prior authorization experience. November 24, 2025. Accessed October 13, 2026. https://www.optum.com/en/newsroom/pharmacy-medications/optum-rx-continues-improve-prior-authorization-experience.html
Salzbrenner SG, McAdam-Marx C, Lydiatt M, et al. Perceptions of prior authorization by use of electronic prior authorization software: a survey of providers in the United States. J Manag Care Spec Pharm. 2022;28(10):1121. doi:10.18553/jmcp.2022.28.10.1121
Garcia J. Prior authorization in the pharmacy benefit. Pharmaceutical Care Management Association presentation to the National Association of Insurance Commissioners Prescription Drug Coverage (B) Working Group. October 5, 2026. Accessed October 13, 2026. https://content.naic.org/sites/default/files/call_materials/pcma-presentation.pdf
Ganguli I, Daley NE, Soto MJ, et al. Prescription real-time benefit tools: clinicians receive frequent alerts yet rarely accept the suggested changes. Health Aff (Millwood). 2026;45(2):146-153. doi:10.1377/hlthaff.2025.00783
Centers for Medicare & Medicaid Services. Proposal to support National Council for Prescription Drug Programs (NCPDP) standards, CMS-0062-P. 2026. Accessed October 13, 2026. https://www.cms.gov/files/document/ncpdp-standards-workflow-cms-0062-p.pdf
CoverMyMeds. 2020 electronic prior authorization report: executive summary. Accessed October 13, 2026. https://insights.covermymeds.com/medication-access-report/2020/electronic-prior-authorization
