Prior Authorization Relief Act
- Bill Number
- S. 3762
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Health
- Status
- Introduced
- Latest Action
- 2026-02-03: Read twice and referred to the Committee on Finance.
- Last Updated
- 2026-04-14T11:03:26Z
AI-Generated Summary
Purpose
The Prior Authorization Relief Act aims to streamline and standardize the prior authorization process in the Medicare Advantage (MA) program. Prior authorization is a requirement where healthcare providers must get approval from an insurance plan before providing certain services or drugs to ensure they are medically necessary. This legislation seeks to reduce administrative burdens for high-cost, commonly approved items and services by identifying inefficiencies and creating uniform rules across MA plans, while allowing exemptions for certain innovative payment models.
Key Provisions
- Audit Requirement: By January 1, 2027, the Secretary of Health and Human Services (who oversees Medicare) must conduct an audit of prior authorization processes for items, services, and covered Part D drugs (prescription drugs under Medicare) in MA plans. The audit will identify those that meet all three criteria:
- They account for the top 10% of reimbursements (payments) under MA.
- There is strong clinical evidence supporting a standard medical policy for prior authorization.
- The current process involves too many steps, making it overly complex.
- Standardization Rule: By May 1, 2028, based on the audit, the Secretary must issue a final rule to create uniform prior authorization requirements (including forms) for the identified items, services, and drugs. This applies to all MA plans, including those that also cover drugs (MA-PD plans).
- Exemption for Risk-Based Models:
- Standardized prior authorization does not apply if the items/services are provided or drugs are prescribed by providers or suppliers in "two-sided risk models." These are payment arrangements tested or implemented under Medicare's innovation programs (like section 1115A) or shared savings programs (like Accountable Care Organizations under section 1899), where participants share both financial risks (potential losses) and rewards (potential gains).
- MA plans can request an exception to this exemption, allowing their own prior authorization rules to continue for enrollees in their plans.
Significant Changes to Existing Law
- This amends Section 1859 of the Social Security Act, which governs MA plans, by adding a new subsection (j) specifically on prior authorization.
- Previously, MA plans had flexibility to set their own prior authorization rules, leading to variations across plans. The bill introduces a mandatory federal audit and standardization for specific high-volume, burdensome cases, reducing plan-level discretion.
- It creates a new exemption process tied to value-based care models (like ACOs), promoting integration with Medicare's efforts to shift from fee-for-service to risk-sharing payments, but allows plans to opt out of the exemption.
Potential Impacts
- On Government Agencies: The Centers for Medicare & Medicaid Services (CMS) will face increased administrative workload to conduct the audit and develop the standardization rule, potentially requiring new resources for data analysis and rulemaking.
- On Citizens (Enrollees): MA beneficiaries (mostly seniors and people with disabilities) may experience faster access to high-cost services and drugs due to simplified processes, reducing delays in care. However, impacts could vary if plans opt to retain stricter rules.
- On Providers and Suppliers: Those in risk-based models gain relief from standardized prior authorization, encouraging participation in innovative programs. Others may benefit from fewer steps overall, easing paperwork burdens.
- On International Relations: No direct impacts, as this is a domestic healthcare policy focused on U.S. Medicare.
Main Stakeholders Affected
- Medicare Advantage Organizations (Insurers): Must comply with new standardized rules but can request to keep their own processes; this could standardize operations but limit flexibility.
- Healthcare Providers and Suppliers: Especially those in ACOs or similar models, who benefit from exemptions; others gain from reduced complexity in prior authorizations.
- Medicare Enrollees: Primary beneficiaries, potentially facing fewer barriers to care for common high-cost treatments.
- CMS and the Secretary of Health and Human Services: Responsible for implementation, audits, and rulemaking.
- Pharmaceutical Companies: Affected indirectly through standardized prior authorization for Part D drugs, which could influence prescribing and reimbursement patterns.
Notable Legal, Constitutional, or Political Implications
- Legal Implications: The bill enhances federal oversight of private MA plans (which are contracted with CMS), potentially leading to litigation if plans challenge the standardization as overreach into their operational autonomy. It builds on existing Medicare authority without creating new enforcement mechanisms.
- Constitutional Implications: None significant; it operates within Congress's enumerated powers under the Spending Clause (Article I, Section 8) to regulate federal programs like Medicare. No free speech, privacy, or due process concerns are evident.
- Political Implications: This could appeal to bipartisan interests in reducing healthcare bureaucracy and promoting value-based care, but may face opposition from insurers concerned about lost flexibility or increased federal mandates. It aligns with broader efforts to modernize Medicare amid rising MA enrollment (over half of beneficiaries).
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Sen. Whitehouse, Sheldon [D-RI]
Cosponsors (1)
Recent Actions
- 2026-02-03: Read twice and referred to the Committee on Finance.
- 2026-02-03: Introduced in Senate
Bill Versions
- Prior Authorization Relief Act — issued 2026-02-03 — PDF (4 pages)