HHS & CMS Secure Major Reforms to Prior Authorization

Date: June 23, 2025 (U.S. Department of Health & Human Services press release)

Published: July 7, 2025

What HHS and CMS Are Doing

HHS Secretary Xavier Becerra and CMS Administrator Dr. Mehmet Oz announced a voluntary industry pledge to modernize and streamline the prior authorization process. This agreement includes participation from nearly all major health insurers such as Aetna, Blue Cross Blue Shield, Cigna, Humana, Kaiser Permanente, UnitedHealthcare, and others, who collectively cover approximately 80% of the U.S. population. Under this initiative, these insurers have committed to¹:

• Implementing standardized electronic prior authorization (ePA) using FHIR APIs
• Reducing the overall volume of services requiring prior authorization by January 1, 2026
• Honoring existing prior authorizations when patients switch health plans
• Enhancing transparency around authorization decisions and appeals
• Offering real-time prior authorization decisions for certain services by 2027
• Ensuring that denials are reviewed by appropriately trained healthcare professionals

CMS will monitor compliance and reserve the right to enforce regulatory action if insurers do not meet these voluntary commitments.

See: CMS Makes Improvements to Prior Authorization Process

Context: Building on Earlier Reforms

This pledge builds on prior efforts from individual insurers to modernize prior authorization processes, most notably UnitedHealthcare’s adoption of FHIR-based technology for select services in 2023. Over the past two years, UHC and others gradually expanded electronic workflows for radiology and specialty diagnostics, laying foundational improvements. However, inconsistent standards, reliance on manual entry, and opaque decision-making have continued to burden providers and delay care. This new HHS-led agreement marks a significant step forward: a national, unified framework endorsed by both public and private sectors. With oversight from CMS, this reform moves prior authorization from an outdated administrative hurdle to a more transparent, digital-first process.

See: UnitedHealthcare’s Z-Code Requirements for Genetic Testing Claims Impacts Laboratories and Payers

Implications for Laboratory Professionals

For laboratory billing and operations teams, these changes represent a major opportunity to improve efficiency. As insurers reduce the number of services requiring prior authorization and commit to faster, real-time approvals, labs can expect fewer delays and denials, especially for high-value genetic tests. This streamlining can reduce back-and-forth documentation requests, lower administrative costs, and improve overall revenue cycle management. Additionally, the new continuity requirements when patients switch plans may prevent labs from losing reimbursement on previously authorized services. Laboratories that update their billing systems to align with FHIR standards and proactively engage with insurers on coding requirements will be best positioned to take advantage of this shift.

Implications for OB/GYN Physicians

For OB/GYN practices offering in-house genetic testing, such as NIPT, carrier screening, and expanded panels, the impact is particularly promising. Historically, prior authorization has created barriers to access and reimbursement for these tests. With the new reforms, physicians can expect a smoother experience: fewer authorizations required, faster decisions, and better continuity of care when patients transition between insurers. These changes can reduce administrative burdens on front-office staff, speed up test ordering workflows, and improve patient satisfaction. In turn, this makes in-house laboratories more viable and supports the delivery of timely, personalized care in women’s health settings.

Bottom Line

The HHS and CMS announcement represents a pivotal moment in the evolution of prior authorization. With broad payer support and federal oversight, the industry is moving toward a more unified and efficient system. For laboratories and OB-GYN clinics involved in genetic testing, now is the time to assess internal workflows, adopt modern billing infrastructure, and prepare for a more streamlined future in prior authorization and reimbursement.

Sources

¹ U.S. Department of Health and Human Services. (2025, June 23). Kennedy, Oz, CMS secure healthcare industry pledge to fix prior authorization system. https://www.hhs.gov/press-room/kennedy-oz-cms-secure-healthcare-industry-pledge-to-fix-prior-authorization-system.html