CMS and AHIP Isn’t the Finish Line: It’s the Starting Gun for Prior Auth Innovation

The Centers for Medicare & Medicaid Services (CMS) Interoperability and Prior Authorization Final Rule (CMS-0057-F) sets a new standard for how payers exchange data and respond to authorization requests, bringing long-overdue modernization to this critical process. 

At its core, the rule requires impacted health plans to implement a FHIR-based Prior Authorization API by January 2027. It also mandates standardized response timelines, includes requirements to document the reason for denials, and obliges plans to publicly report metrics on prior authorization performance.

The final rule was echoed in a recent pledge by AHIP and some of the nation’s largest health plans to overhaul the authorization process by 2027, committing to real-time decisions, electronic workflows, and greater transparency.

It’s a rare moment of alignment between regulation and industry intention. But let’s be clear: compliance regulations and pledges are not innovation. A compliant API plugged into a fragmented or opaque utilization management (UM) workflow will not restore trust, reduce abrasion, or drive better outcomes. Without systemic redesign, these efforts risk reinforcing the same pain points that made prior authorization a flashpoint for payers and providers.

Compliance alone won’t solve the real problems

Despite its intended purpose — to ensure appropriate care and contain costs — UM has become synonymous with administrative burden, opaque rules, and patient delays. Providers cite it as one of the top contributors to burnout. Patients experience confusion and care delays. And health plans increasingly find themselves under public scrutiny, even litigation, over perceived misuse of UM tools.

Against that backdrop, CMS-0057-F and the AHIP pledge are welcome interventions. But unless the industry addresses the underlying design flaws in how UM is implemented, these problems will persist. The new rule sets expectations for digital enablement. It doesn’t fix broken workflows, reduce manual review burden, or instill clinical trust in the system.

It’s tempting to default to the minimum viable product. But that approach will ultimately hurt health plans through higher administrative costs, increased appeals, network dissatisfaction, and reputational risk. The most forward-thinking organizations will treat this rule not as a ceiling, but a floor.

Three innovation imperatives for health plans

To turn the vision of modernizing authorizations into real value, health plans should focus on three key areas of innovation:

1. Design for provider ease — not just internal efficiency

Technology that is cumbersome or inconsistent won’t get used. Providers will fall back on the phone or fax, and digital adoption will stall.

Health plans must prioritize ease of use in their digital channels. That means:

• Creating a single point of entry for all prior auth submissions, regardless of whether requests are handled internally or delegated
• Supporting bi-directional communication so that requests for additional information happen digitally, not manually
• Embedding auth functionality directly into EHR workflows, reducing context-switching and friction

When provider experience improves, compliance and automation follow.

2. Make clinical decision-making transparent and trustworthy

Automation can accelerate review, but only if clinicians trust the results. Trust starts with transparency.

Instead of relying on opaque predictive models, UM solutions should:

• Leverage clinical-first engines that match clinical information submitted for review to the health plan’s medical necessity criteria
• Surface clearly why a case meets, or doesn’t meet guidelines
• Make those determinations visible to both payers and providers

This transparency doesn’t just improve adoption. It also provides a clear audit trail for CMS, the National Committee for Quality Assurance (NCQA), and internal quality teams. It also allows health plans to reserve clinical review resources for cases that truly require expertise.

3. Create a unified, modular UM ecosystem

Too many health plans rely on a patchwork of point solutions and delegated vendors, each with their own rules, portals, and workflows. The result is inconsistent decision-making, limited visibility, and significant provider abrasion.

The better path forward is a modular but unified UM infrastructure that allows health plans to:

• Seamlessly integrate both internal and external UM components via FHIR APIs
• Curate rule engines, clinical content, and automation layers that reflect plan-specific strategies
• Use analytics to identify policy gaps, measure network behavior, and proactively improve policies to clinical documentation

This approach gives health plans the control and agility they need to evolve with market demands, while simplifying the provider experience.

Turning compliance into strategic leverage

By going beyond CMS-0057-F, health plans can unlock significant benefits:

• Lower admin costs from fewer manual reviews and appeals
• Faster time to treatment for patients who meet criteria
• Improved provider satisfaction that strengthens networks
• Regulatory readiness backed by transparent, traceable workflows

Perhaps most importantly, early movers have a chance to define the next generation of UM standards, like shaping how interoperability, AI, and clinical criteria are applied in future regulations.

Both the AHIP pledge and the CMS final rule signal a willingness to lead. But the leaders who will move the industry forward are those who translate policy and promise into seamless, scalable, and trusted solutions today.

Photo: Piotrekswat, Getty Images

Matt Cunningham, EVP of Product at Availity, spent nine years in the Army in light and mechanized infantry units, including the 2nd Ranger Battalion. He brought his Army operations experience to the healthcare industry and has been focused on solving the problem of prior authorizations and utilization management for the past 15+ years. He helped scale a services company from $20M to the largest healthcare benefit services company. Matt has served as Head of Call Center Operations, Director of Product Operations, Chief Information Officer, and lead integration efforts for mergers and acquisitions.

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