An improved Prior Authorization Final Rule can result in shorter wait times, fewer delays in the delivery of patient care, and a reduction in costs.
CMS has finalized the Interoperability and Prior Authorization Final Rule (CMS-0057-F), which was published by CMS on January 17, 2024. It will reduce the burden on patients, providers, and payers by shortening and improving the prior authorization process for medical items and services (excluding drugs).
As a result of the new rule, the Department of Health and Human Services estimates that $15 billion will be saved over the course of the next ten years. It is also mandated by the rule that payers provide clear and timely communication regarding the Prior Authorization process, in addition to providing providers with timely and accurate responses to their requests.
As part of the rule, providers will have access to timely information about prior authorization decisions, which is designed to improve patient safety.
According To The Rule, Several Government-Administered Health Plans Must Meet The Following Requirements:
- Medicare Advantage
- Medicaid and the Children’s Health Insurance Program (CHIP) are fee-for-service programs
- Medicaid managed care plans
- CHIP managed care entities
- Issuers of Qualified Health Plans (QHPs) offered on federally facilitated exchanges (FFEs).
Providing timely care to patients:
It is important to have Prior Authorization in order to ensure that your health plan covers a procedure, but it is not always a quick process. Often, patients who need urgent care are left waiting for their necessary care while providers are struggling to meet the often complex requirements of payers for their services. As CMS points out, “This final rule establishes requirements for certain payers to streamline Prior Authorization processes and complements the Medicare Advantage requirements that were finalized in the Contract Year (CY) 2024 MA and Part D final rule, which added continuity of care requirements as well as reduced disruptions for beneficiaries.”
Beginning In 2026, The Impacted Payers Listed Above (Not Including Qhp Issuers On The Ffes) Will Be Required To Adhere To The Following Rules For Prior Authorization Requests:
- Send decisions within 72 hours for urgent requests
- Send decisions within seven calendar days for standard (i.e., non-urgent) requests
- Include a specific reason for denying a request
- Publicly report prior authorization metrics
By implementing these requirements, response times will be shortened in many cases, and it will be easier to resubmit the request or appeal if necessary. The American Medical Association (AMA) advocates for even faster turnaround times: 24 hours for urgent requests and 48 hours for standard requests in order to protect the health and safety of patients. A physician survey conducted by the American Medical Association in 2022 revealed that one third of the 1,001 physicians surveyed had encountered a serious adverse event as a result of prior authorization, including hospitalization, life-threatening events, disability or permanent bodily damage, and even death.
Technical and Operational Requirements:
A final rule that will affect impacted payers will also require them to implement Health Level 7 (HL7®) Fast Healthcare Interoperability Resources (FHIR®) Prior Authorization application programming interfaces (APIs), which, by automating the end-to-end prior authorization process, can facilitate the exchange of health data and facilitate a more efficient electronic prior authorization process between providers and payers. The patient will be able to access the majority of their personal data and will also be able to receive a better understanding of their payer’s Prior Authorization process and its impacts on their healthcare.
According to public comments received from patients, providers, and payers, CMS is delaying the dates for compliance with API policies from Jan. 1, 2026, to Jan. 1, 2027, in order to allow time for training and updating or building APIs. The impacted payers will be required beginning in January 2027 to extend their existing patient access APIs to include information regarding Prior Authorizations, which providers can access to retrieve patient claims, encounters, clinical information, and Prior Authorizations. When patients are moving between payers or have multiple concurrent payers, impacted payers will need to exchange most of those same data (with a patient’s permission) using a Payer-to-Payer FHIR® API.
As part of the final rule, a new electronic measure will be added that will allow eligible candidates participating in the Merit-based Incentive Payment System (MIPS) as well as eligible hospitals and critical access hospitals to report how they utilized the Prior Authorization APIs of payers to submit electronic requests.