On April 14, 2026, the Centers for Medicare & Medicaid Services (CMS) published its proposed rule, Medicare and Medicaid Programs; Patient Protection and Affordable Care Act; Interoperability Standards and Prior Authorization for Drugs.
As noted in Applied Policy’s summary, the proposed rule includes several requests for information (RFIs). These include an RFI focused on prior authorization for laboratory tests and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). Through this RFI, CMS is seeking input on how these processes affect patient care and provider burden, including delays in care, administrative complexity, and coordination challenges, as well as opportunities to simplify processes, improve documentation standards, and better leverage automation and technology.
The RFI revisits a set of questions that CMS has addressed in a targeted, incremental manner for more than a decade.
Background
Prior authorization is most commonly associated with Medicare Advantage and Medicaid managed care, where it is used to assess medical necessity before services are delivered. Traditional fee-for-service (FFS) Medicare has historically relied more heavily on claims review and documentation requirements applied at the time of billing and afterward. This distinction has shaped provider expectations and operational workflows across programs.
However, prior authorization is not entirely absent from FFS Medicare. CMS has introduced it in certain, limited contexts, particularly where concerns about improper payment or unnecessary utilization have been most pronounced. This includes the Power Mobility Device demonstration, which was introduced in 2012 and informed the development of a national prior authorization process for selected DMEPOS items.
CMS has applied similar approaches in other areas, including the voluntary Repetitive, Scheduled Non-Emergent Ambulance Transport model and a model focused on the non-emergent use of hyperbaric oxygen therapy. More recently, CMS has continued to explore pre-service review approaches through models such as the Wasteful and Inappropriate Service Reduction (WISeR) Model.
Through such initiatives, CMS has used prior authorization selectively in FFS Medicare, focusing on services that are high-cost, high-volume, or particularly susceptible to improper payment. In these limited contexts, prior authorization has functioned as a tool to support existing coverage requirements rather than to establish a broad utilization management framework. CMS has complemented this approach with other mechanisms in FFS, including payment reforms such as the DMEPOS Competitive Bidding Program.
Existing Requirements
FFS Medicare has long imposed detailed front-end requirements on DMEPOS and laboratory services. Local coverage determinations (LCDs) establish clinical criteria for coverage. Face-to-face encounter requirements and written order requirements define when items can be furnished. Consistent with FFS Medicare’s post-payment review framework, often described as “pay and chase,” claims are generally paid upon submission but may be subject to subsequent audit and recoupment if documentation and coverage criteria are not met.
These requirements shape ordering behavior and supplier workflows, even in the absence of a formal pre-service approval process.
Prior authorization would change the timing and structure of that review. It would introduce a defined step before a service is furnished, requiring documentation to be submitted in advance and a determination to be made before proceeding. CMS has described this as requiring the same information necessary to support payment, but earlier in the process.
For some stakeholders, such a structure would offer greater predictability. An affirmed prior authorization decision can reduce exposure to post-payment audits and denials, particularly for high-cost items. For others, it adds additional administrative steps that affect workflow, timing, and coordination across providers, laboratories, and suppliers. Some have also noted that the value of this predictability depends in part on the extent to which an affirmed decision limits the risk of subsequent audit and recoupment.
What CMS is Seeking
The current RFI asks questions rather than proposing policy changes.
CMS is seeking input on how prior authorization processes for laboratory tests and DMEPOS items affect access, workflow, and outcomes. For DMEPOS suppliers, several of the issues CMS identifies are familiar pressure points. Differing documentation requirements across payers contribute to denials and trigger appeals that can take months to resolve. A structural challenge compounds this: suppliers are often dependent on the ordering physician to submit prior authorization requests and supporting documentation, even though responsibility for furnishing the item ultimately rests with the supplier. When documentation is missing or inadequate, the impact may fall on suppliers and patients, whether through delayed access to equipment, unexpected patient billing, or lost payment.
CMS also asks whether greater consistency in documentation standards could reduce burden, a question with direct relevance to DMEPOS suppliers navigating varying requirements across Medicare Administrative Contractors, MA plans, and other payers. The agency seeks feedback on how automation and technology could improve these processes and how prior authorization requirements affect the healthcare workforce. The agency’s questions also intersect with broader discussions about the use of automation and artificial intelligence in prior authorization, including concerns raised in managed care settings about the extent to which automated processes can substitute for human clinical review.
The RFI does not propose expanding prior authorization across FFS Medicare. It draws in part on experience in managed care settings and seeks input on how these processes function across payer types. However, the questions it raises have broader relevance. In the context of CMS’s prior use of pre-service review in targeted FFS models, including WISeR, this focus may also reflect ongoing consideration of how such approaches could be applied in specific settings, particularly for services that are high-cost or susceptible to improper payment.
The questions posed in the RFI are grounded in operational realities that providers, laboratories, and suppliers navigate daily, including how prior authorization functions in practice, where it creates challenges, and where it may offer benefits in terms of predictability and program integrity.
Comments are due June 15, 2026. Applied Policy is working with clients to assess the potential implications of the RFI and to develop comments that reflect practical experience across laboratory and DMEPOS settings.