CMS sets new prior authorization standard

On Wednesday, the Center for Medicare and Medicaid Services (MCS) finalized the CMS Interoperability and Prior Authorization Final Rule. The rule aims to enhance prior authorization procedures and streamline the electronic exchange of health data to both alleviate strain on stakeholders and save an estimated $15 billion in the next decade.

“When a doctor says a patient needs a procedure, it is essential that it happens in a timely manner,” said HHS Secretary Xavier Becerra in a statement. “Too many Americans are left in limbo, waiting for approval from their insurance company. Today the Biden-Harris Administration is announcing strong action that will shorten these wait times by streamlining and better digitizing the approval process.”

The Final Rule sets new standards for Medicare Advantage organizations, Medicaid and the Children’s Health Insurance Program (CHIP) fee-for-service programs, Medicaid managed care plans, CHIP managed care entities, and issuers of Qualified Health Plans on the Federally-Facilitated Exchanges. 

“CMS is committed to breaking down barriers in the health care system to make it easier for doctors and nurses to provide the care that people need to stay healthy,” noted CMS Administrator Chiquita Brooks-LaSure. “Increasing efficiency and enabling health care data to flow freely and securely between patients, providers, and payers and streamlining prior authorization processes supports better health outcomes and a better health care experience for all.”

Related article: Prior authorizations stuck in the past

Key Features of CMS Interoperability and Prior Authorization Final Rule

• Starting mainly in 2026, certain payers, excluding Qualified Health Plan (QHP) issuers on the Federally-facilitated Exchanges (FFEs), will need to provide prior authorization decisions within 72 hours for urgent requests and seven calendar days for standard requests.
• The rule mandates that all impacted payers must clearly state reasons for denying prior authorization requests. This information will be used to expedite appeals and resubmission of requests. Additionally, these 
• Payers are required to publicly report prior authorization metrics, aligning with the practices already in place for Medicare Fee-for-Service (FFS).
• Affected payers must also implement the Health Level 7 (HL7®) Fast Healthcare Interoperability Resources (FHIR®) Prior Authorization application programming interface (API). This new technological minimum standard, already adopted by Medicare FFS, is designed to automate and expedite the end-to-end prior authorization process between providers and payers.