Washington, D.C. — The federal agency that oversees Medicare and Med making its most aggressive push yet to kill the paper-based prior authorization process that has long frustrated nursing home operators, residents, and their families.
CMS Administrator Dr. Mehmet Oz announced Tuesday that the agency is expanding its Health Tech Ecosystem to include electronic prior authorization — bringing together EHR vendors, health systems, hospitals, physician practices, digital health developers, and payers under one coordinated effort. The goal is to make electronic prior authorization work end-to-end, on time, for every patient.
“A common practice imposed by health insurers on patients and providers is their intrepid need to second-guess clinician treatment decisions by requiring prior authorizations before paying a claim,” Oz said. “The current prior authorization process creates unnecessary delays for patients, burdens health care providers with excessive paperwork, and erodes trust between payers and health care providers.”
Electronic prior authorization interfaces from select payers are set to go live January 1, 2027. CMS projects the shift will save patients, providers, and payers roughly $15 billion over 10 years — with drug prescription reforms to follow in October 2027.
What It Means for Nursing Homes
For skilled nursing facilities, prior authorization has been a persistent source of delays and denied care. Medicare Advantage plans in particular have drawn sharp criticism for requiring approvals that slow admissions and cut short stays — a problem that bipartisan lawmakers have been pushing to fix through legislation.
Tim Ashe, chief clinical officer at EHR company WellSky, called the CMS announcement a meaningful step forward. “Today, prior authorization remains highly manual across much of post-acute care, leading to delays, administrative burden, and unnecessary friction for providers seeking to initiate care quickly,” he said. “These breakdowns are also a leading driver of costly claim denials.”
Ashe added that as hospitals get pulled more directly into the prior authorization process, there’s a real opportunity to shift some of that burden away from post-acute providers — including nursing homes — and better align care transitions.
Industry Cautiously Optimistic
Not everyone is ready to celebrate. LeadingAge, which represents nonprofit aging services providers, supports the direction but raised pointed questions about whether nursing homes will actually benefit.
“Providers are not required to use these tools, and it is not clear from CMS communications whether post-acute care providers, including skilled nursing, will be able to take advantage of these electronic submissions,” said Nicole Fallon, LeadingAge’s vice president of managed care and integrated services.
Fallon also flagged a funding gap: unlike hospitals, post-acute care providers never received meaningful-use dollars to upgrade their technology for health information exchanges. That means many nursing homes may not have the platforms needed to plug into the new system at all.
There’s also a cost concern. Third parties developing digital prior authorization tools for Medicare Advantage plans may charge EHR vendors for access — a move that could add expenses rather than reduce them.
Progress Already Underway
The announcement builds on momentum that’s been building for years. In June 2025, more than 40 providers and major insurers pledged to overhaul the prior authorization process. As of April, health plans had already reduced prior authorization requests by 11% across a range of medical services — cutting 6.5 million requests.
CMS says the new ecosystem-wide coordination is what separates this effort from past attempts. Working groups across all stakeholder sectors will tackle workflow gaps and technical handoffs that no single group can fix alone.
For nursing homes, the question now is whether they’ll have a real seat at the table — or whether this reform, like others before it, will be built around hospitals and leave post-acute care scrambling to catch up.
