Medicare patients will have access to real-time prescription drug pricing and streamlined prior authorization decisions starting in October, the Department of Health and Human Services (HHS) announced Sept. 2.
That’s enabled by a new regulation that allows doctors with certified information technology systems to obtain up-to-the-minute pricing information.
Providers will also be able to submit prior authorization requests to insurers electronically, reducing the time for a decision and easing a longstanding problem for doctors and patients.
Insurers Cooperate
A coalition of 10 large health insurance companies pledged in June to overhaul the often-criticized prior authorization process for more than 250 million Americans enrolled in commercial, Medicare Advantage, and Medicaid managed care plans.Kennedy thanked insurance companies for their commitment, and the Trump administration was “actively working with industry to make it easier to get prior authorization for common services such as diagnostic imaging, physical therapy, and outpatient surgery.”
Physicians handle about 40 preauthorization issues and requests each week, taking about 12 hours on the paperwork, according to Dr. Mehmet Oz, director of the Centers for Medicare and Medicaid Services.
Technology Driven
Part of the problem was the lack of a standardized system for submitting prior authorizations.“The healthcare system remains fragmented and burdened by outdated manual processes, resulting in frustration for patients and providers alike,” Mike Tuffin, president and CEO of trade association America’s Health Insurance Plans, said in a June statement praising the industry’s effort to streamline the process.
The finalization of a federal certification for health information systems will enable Medicare providers to obtain prior authorizations electronically.
Achieving that was an important step toward reducing the paperwork burden on health providers and facilitating patients’ access to care, according to the Assistant Secretary for Technology Policy and National Coordinator for Health Information Technology, Dr. Tom Keane.
HHS estimated that the electronic workflow would save health care providers millions of hours of administrative work.
Also, insurers have pledged to reduce the number of treatments that require prior authorization by Jan. 1, 2026.
Dr. Elizabeth Potter, a plastic surgeon, expressed skepticism in June that a system depending on voluntary compliance would be successful.
Drug Pricing
The information exchange will enable providers to compare up-to-date drug prices, the HHS said in a statement.Medicare was authorized to negotiate prices for some medications in 2022, but the first round of negotiated prices for 10 medications will not take effect until Jan. 1.
The new system aims to give providers a way to find low-cost alternative medications within a patient’s plan before submitting the prescription.
That will be a particular benefit for Medicare Part D patients, according to HHS.
Unlike patients enrolled in Medicare Advantage plans, Medicare pays providers directly for drugs prescribed to patients in Medicare Part D.
That policy, established by executive order, seeks to require manufacturers to offer their lowest price on medications to U.S. patients in the Medicare and Medicaid systems. That order has not yet been fully implemented.
Trump offered incentives for drug makers to voluntarily comply with the policy for all U.S. patients.
If not, the president said he would “take additional aggressive action.”
Related Initiative
The price transparency and streamlined prior authorization are part of a larger initiative announced by Trump in June, which aims to make it easier for patients to access and share their health information, and make decisions based on the information.Major technology firms, including Amazon, Anthropic, Apple, Google, and OpenAI, have signed on to the program, Trump said on June 30.
