Plan Ahead: Preparing for Medicaid Prior Authorization Changes

What We Know About the Latest Proposed Changes

In the past two years momentum behind the need to update the Prior Authorization (PA) process has been growing at both the federal and state levels. From the Centers for Medicare & Medicaid Services (CMS) proposing new rules to the HHS Office of the Inspector General (OIG) raising concerns about access to care through a fair and equitable process for Medicaid beneficiaries, it's clear that changes to the PA process will be required for Medicaid prior authorizations in the foreseeable future. As planning begins for the implementation of the proposed CMS rules in January 2026, our Acentra Health experts are considering updates to four key areas:

The latest CMS proposed rule is slated to go into effect on January 1, 2026, and applies to Medicaid managed care plans, the majority of Medicaid fee-for-service plans , Children’s Health Insurance Program (CHIP) managed care and fee-for-service arrangements, Medicare Advantage (MA) plans, and Qualified Health Plans (QHP) on the federally facilitated health insurance marketplace (i.e., healthcare.gov). The new ruling focuses on improving automation of the PA process , increasing access to data , and enhancing the beneficiary and provider experiences. States may add additional requirements on top of the new CMS rules.

In addition, the HHS OIG’s July 2023 report detailed variations in the Medicaid MCO prior authorization process. A significant number of states surveyed in OIG’s review reported they had limited oversight of the prior authorization process including initial decisions, appeals, and reconsiderations. The OIG is urging CMS to provide additional guidance to benefit states and to ensure Medicaid beneficiaries have equitable and timely access to all appropriate care.

Leveraging Key Focus Areas for a Smoother Transition

With changes inevitably on the horizon for Medicaid Prior Authorization processes, our Acentra Health team of technology and operations experts is beginning to prepare for the new standards. As a partner to 23 states providing technology and services that are part of the prior authorization process, we are reviewing and planning for upcoming changes in these key areas:

1. Systems – To comply with the new rule, all systems that process PAs must be ready to meet the requirements by the end of 2025, including systems that handle PA data exchange. These systems will need to receive data through various proposed standard application programming interfaces (APIs), such as:
   • • Patient Access API
     • Prior Authorization Requirement, Documentation and Decision (PARDD) API
     • Provider Access API
     • Payer-to-Payer Data Exchange using Fast Healthcare Interoperability Resources (FHIR)^® API

   With changes to work queues, turn-around-time measures, and corresponding alerts, systems may need to be reconfigured. Additionally, in order to meet the new transparency requirements, systems will need to provide the correct access and information to specific PA requests to the appropriate stakeholders along with new mandatory report-outs that promote transparency in the process. Systems will be required to make patient’s health data accessible to the new payers, concurrent payers, and providers upon request and have the ability for the patients to opt in or out of this data exchange with ease.

2. Processes and Staffing – Acentra Health experts recommend as soon as regulations are finalized and processes are updated, the impacts from the process changes be assessed. Impacts may require updates to operational workflows, changes to staffing models, and additional training for staff to go over changes to their work. If the number of operational changes is significant, change management best practices could be considered in planning for January 2026.
3. Outreach and Education – Our Acentra Health team prioritizes the beneficiary and provider experience, which makes stakeholder engagement a top priority especially during times of change. Changes to the PA process require a proactive and transparent effort with all stakeholders. Providers and payers will need to consider changes and updates to their systems, processes, and staff as needed. Medicaid beneficiaries, guardians, and caregivers will also need to be aware of any new processes, such as opportunities to opt in/opt out with data exchange, and related impacts to them.
4. Oversight of the PA Process – Medicaid MCO performance and quality oversight is performed by states as well as independent partners which complete the annual external quality review process. With the updated PA rule as well as the OIG’s spotlight on PA denials, this may be a good time for states to consider enhancing oversight of the Medicaid Prior Authorization Process or at the very least to review the process and performance standards to make sure they are up to date with the new rules. States that utilize vendor partners for prior authorization may want to review and update service level agreements in contracts.

What's Next?

January 2026 is the go live date for the drafted federal regulations. Some states are proactively beginning preparations including assessing current processes, identifying necessary updates of IT systems and data exchanges, preparing for key stakeholder discussions, and determining necessary modifications from an oversight perspective as outlined previously in our key areas. Beginning preparation efforts early will allow a coordinated effort to assess the current state, develop a plan to be ready, and coordinate across all stakeholders in the process including state program, technology, and operations teams, vendor partners, and additional stakeholders such as providers and beneficiaries.

Acentra Health is preparing for the pending changes to the Medicaid PA process and recognizes the potential benefits states, providers, and beneficiaries will receive from greater automation, enhanced turn-around-times, and greater transparency. Engaged by 45 Medicaid Departments, we have experience working with states to implement changes. We have 30+ years of experience with utilization management which includes both services and technology for PAs and appeals as well as support for the fair hearings process.

A Partner in Successful Change Integration

Our teams are assessing changes needed before the proposed January 2026 date and are in the early stages of preparing our systems for automated data flow through the FHIR^® APIs . We are reviewing our processes for transparency to ensure we have the right reporting in place and are diligently planning for all stakeholder impacts. As CMS’ proposed rule moves through Congress, Acentra Health will be working with all of our clients to plan, implement necessary changes, conduct readiness reviews, and coordinate stakeholder outreach as appropriate. Implementing changes can be a complex and time-consuming task and requires a detailed, systematic approach to ensure readiness of technology, process, people, and education of stakeholders. Partners with decades of both operations and technology experience with prior authorizations, like Acentra Health, can be key to successful change integration. To connect with our experts, visit our page here.