Medicare Advantage insurers made 52.8 million prior authorization determinations in 2024 and fully or partially denied 4.1 million of them, or 7.7 percent, KFF reported in January 20261 using CMS data. Only 11.5 percent of those denials were appealed. Of the appeals, 80.7 percent ended with the denial partly or fully overturned.
A federal rule that took effect for most of its operational provisions on Jan. 1, 2026, now puts deadlines on many of those decisions. It does not apply to drugs.
For prescriptions, a separate and older set of rules governs how fast a plan must answer, what a prescriber has to send, and when a patient gets a temporary supply. Those rules decide how long someone waits at the pharmacy when a claim comes back with a prior authorization or step therapy flag, which often involves a generic the plan wants tried first.
Two tools plans use
Prior authorization means the plan must approve coverage before it pays. Step therapy is a form of it. The plan covers a drug only after the patient has tried one or more preferred drugs, frequently lower-cost generics, or after the prescriber documents why those would not work.
Plans also use quantity limits, and a single drug can carry all three. A plan's formulary lists which restriction applies to which drug, alongside its tier.
In Medicare Advantage, federal rules narrow what prior authorization can be used for. Under 42 CFR 422.1386, added by a 2023 CMS final rule4, a coordinated care plan may use prior authorization only to confirm a diagnosis or other medical criteria, or to make sure a basic benefit is medically necessary. Once approved, a service cannot later be denied for lack of medical necessity except for good cause or evidence of fraud.
What the 2024 prior authorization rule covers
CMS announced the Interoperability and Prior Authorization final rule, known as CMS-0057-F, on Jan. 17, 2024. It was published in the Federal Register on Feb. 8, 20243 at 89 FR 8758. It applies to Medicare Advantage organizations, Medicaid and CHIP programs and their managed care plans, and qualified health plan issuers on the federally facilitated exchanges.
| Requirement | Compliance date |
|---|---|
| Decisions within 72 hours for expedited requests and 7 calendar days for standard requests (exchange plans excluded) | Jan. 1, 2026 |
| A specific reason for every denial, whatever channel the request came through | Jan. 1, 2026 |
| Public posting of prior authorization metrics | First report by March 31, 2026 |
| Prior Authorization API listing covered items, documentation needs and decisions | Generally Jan. 1, 2027 |
| Prior authorization data added to the Patient Access API | Jan. 1, 2027 |
Source: CMS fact sheet on CMS-0057-F2.
The drug exclusion is explicit. The CMS fact sheet says, "As with all policies in this final rule, this provision does not apply to prior authorization decisions for drugs." The rule's data-sharing provisions likewise exclude prior authorizations for drugs. KFF's counts come from Medicare Advantage reporting on services and are not a measure of pharmacy claims.
Step therapy in Medicare Advantage
Medicare Advantage plans can apply step therapy to physician-administered drugs covered under Part B. A May 2019 CMS final rule5 (84 FR 23832, effective Jan. 1, 2020) wrote the conditions into 42 CFR 422.1367.
A plan may apply step therapy "only to new administrations of Part B drugs, using at least a 365 day lookback period." So a patient already receiving a drug within the past year is not supposed to be sent back to an earlier step. The plan's pharmacy and therapeutics committee must approve the program, and that committee must include at least one practicing physician and one practicing pharmacist who are free of conflicts with the plan and with drug manufacturers. Step protocols may not require a drug the plan does not cover.
The drug-side rules in Part D and marketplace plans
For pharmacy drugs in Part D, a request for coverage is called a coverage determination, and an exception request asks the plan to cover a drug off its formulary or waive a restriction such as step therapy. Under 42 CFR 423.5788, the prescriber must provide a supporting statement for an exception.
| Plan type | Standard decision | Expedited decision | Rule |
|---|---|---|---|
| Medicare Part D, coverage request | 72 hours | 24 hours | 42 CFR 423.5689, 423.57210 |
| Medicare Part D, exception request | 72 hours after the prescriber's statement arrives | 24 hours after the statement arrives | Same |
| Marketplace and other plans covering essential health benefits, drug not on formulary | 72 hours | 24 hours (exigent circumstances) | 45 CFR 156.12212 |
| Medicare Advantage and Medicaid items and services (non-drug) | 7 calendar days | 72 hours | CMS-0057-F |
Part D also has a transition rule. Under 42 CFR 423.12011, a plan must cover a temporary supply, generally at least a month's supply, within the first 90 days for new enrollees taking a drug that is off formulary or that requires prior authorization or step therapy. That gives the prescriber time to file a request or discuss options with the patient.
Marketplace plans that grant a standard exception must cover the drug for the length of the prescription, including refills, under 45 CFR 156.122. If the plan refuses, the enrollee can ask for an external review by an independent organization.
How to ask the plan
Whether a preferred generic is a reasonable first step is a clinical judgment for the prescriber, made with the patient and often with the pharmacist. The paperwork goes faster when everyone knows the plan's criteria. Useful questions for the plan's member services line include which drugs the step therapy protocol requires, what documentation counts as a failed trial, whether the request can be filed as expedited, and how long a decision will take.
At the pharmacy, a pharmacist can say what the rejection code means and whether a transition fill applies. In the prescriber's office, it helps to ask whether the request has been sent and through which channel. For wording, see A script for talking to your pharmacist. While a request is pending, the cash price of a low-cost generic is sometimes small, as GxRadar's NADAC price tracker shows, and How to ask for the cash price explains how to find it. A denial letter should state the reason and the appeal deadline; the KFF figures suggest appeals succeed far more often than they are filed, and GxRadar's guide on appealing a drug coverage denial walks through the steps.
The first public prior authorization metrics under CMS-0057-F were due March 31, 2026. The API requirements follow on Jan. 1, 2027.
Sources and notes
- KFF (2026). Medicare Advantage Insurers Made Nearly 53 Million Prior Authorization Determinations in 2024
www.kff.org/medicare/medicare-advantage-insurers-made-nearly-53-million-prior-authorizatio - CMS (2024). CMS Interoperability and Prior Authorization Final Rule CMS-0057-F, fact sheet
www.cms.gov/newsroom/fact-sheets/cms-interoperability-and-prior-authorization-final-rule-c - Federal Register (2024). Advancing Interoperability and Improving Prior Authorization Processes, 89 FR 8758
www.govinfo.gov/content/pkg/FR-2024-02-08/pdf/2024-00895.pdf - Federal Register (2023). Contract Year 2024 Policy and Technical Changes to the Medicare Advantage Program, 88 FR 22120
www.govinfo.gov/content/pkg/FR-2023-04-12/pdf/2023-07115.pdf - Federal Register (2019). Modernizing Part D and Medicare Advantage To Lower Drug Prices and Reduce Out-of-Pocket Expenses, 84 FR 23832
www.govinfo.gov/content/pkg/FR-2019-05-23/pdf/2019-10521.pdf - Cornell LII (2026). 42 CFR 422.138, Prior authorization
www.law.cornell.edu/cfr/text/42/422.138 - Cornell LII (2026). 42 CFR 422.136, Medicare Advantage and step therapy for Part B drugs
www.law.cornell.edu/cfr/text/42/422.136 - Cornell LII (2026). 42 CFR 423.578, Exceptions process
www.law.cornell.edu/cfr/text/42/423.578 - Cornell LII (2026). 42 CFR 423.568, Standard timeframes and notice requirements for coverage determinations
www.law.cornell.edu/cfr/text/42/423.568 - Cornell LII (2026). 42 CFR 423.572, Timeframes and notice requirements for expedited coverage determinations
www.law.cornell.edu/cfr/text/42/423.572 - Cornell LII (2026). 42 CFR 423.120, Access to covered Part D drugs (transition process)
www.law.cornell.edu/cfr/text/42/423.120 - Cornell LII (2026). 45 CFR 156.122, Prescription drug benefits
www.law.cornell.edu/cfr/text/45/156.122
Superscript numbers in the text link to these sources. GxRadar data (NADAC histories, recall and shortage counts) come from CMS and FDA files described on the sources page. Researched and drafted with AI assistance and checked against the sources above. Information current as of Nov 3, 2026 and may change. Spot an error? It will be corrected once confirmed.
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