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Prior Auth Reform to Save Providers $15B

Analysis  |  By Amanda Norris  
   December 21, 2022

CMS' plan to streamline the prior authorization process would slash the amount of time spent chasing approvals and save providers billions.

The recently released prior authorization proposed rule would place new requirements on payers could save providers $15 billion in 10 years, according to CMS.

The rule, replacing a previous proposal from December 2020, takes aim at prior authorizations, which providers have long cited as a timewaster and resource-drainer.

By revving up technology-enabled prior authorization platforms and demanding that payers provide clear denial reasons and decisions within seven days (and in some cases 72 hours), the new proposal seeks to lessen the administrative challenges associated with pre-approvals.

The impact of the set of proposals, according to CMS’ estimates, would be enormous – underscored by a reduction of 213 million hours and cost-savings of more than $15 billion over the first 10 years, Part B News reported.

Part B News analyzed the data and found that the annual per-practice savings are estimated to be $19,524, and CMS projects that the nation’s nearly 200,000 physician practices would save more than $1 billion in aggregate during the first year. That number would rise to nearly $2 billion by 2035, assuming half of the country’s practices adopt the changes.

CMS is currently seeking comments on the proposed rule and its various policies, which would kick in Jan. 1, 2026, if the rule is finalized as proposed.


Amanda Norris is the Associate Content Manager of Finance, Payer, Revenue Cycle, and Strategy for HealthLeaders.

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