The Centers for Medicare & Medicaid Services (CMS) finalized the CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F) to improve the electronic exchange of health information and prior authorization processes for medical items and services.
The rule sets requirements for Medicare Advantage (MA) organizations, Medicaid and the Children’s Health Insurance Program (CHIP) fee-for-service (FFS) programs, Medicaid managed care plans, CHIP managed care entities, and issuers of qualified health plans offered on the federally facilitated exchanges.
The policies will improve prior authorization processes and reduce burden on patients, providers, and payers, resulting in approximately $15 billion of estimated savings over ten years, CMS said.
The final rule establishes requirements for certain payers to streamline the prior authorization process and complements the MA requirements finalized in the 2024 MA and Part D final rule, which add continuity of care requirements and reduce disruptions for beneficiaries.
Beginning primarily in 2026, impacted payers will be required to send prior authorization decisions within 72 hours for expedited (i.e., urgent) requests and seven calendar days for standard (i.e., non-urgent) requests for medical items and services. For some payers, this new timeframe for standard requests cuts current decision timeframes in half. The rule also requires all impacted payers to include a specific reason for denying a prior authorization request, which will help facilitate resubmission of the request or an appeal when needed. Finally, impacted payers will be required to publicly report prior authorization metrics, similar to the metrics Medicare FFS already makes available.
The rule also requires impacted payers to implement an application programming interface to facilitate a more efficient electronic prior authorization process between providers and payers by automating the end-to-end prior authorization process.
CMS said the new requirements will reduce administrative burden on the healthcare workforce, empower clinicians to spend more time providing direct care to their patients, and prevent avoidable delays in care for patients.
“When a doctor says a patient needs a procedure, it is essential that it happens in a timely manner,” said Xavier Becerra, secretary, US Department of Health and Human Services. “Too many Americans are left in limbo, waiting for approval from their insurance company.”
HHS will also be announcing the use of enforcement discretion for the Health Insurance Portability and Accountability Act of 1996 X12 278 prior authorization transaction standard to further promote efficiency in the prior authorization process.
“Increasing efficiency and enabling healthcare data to flow freely and securely between patients, providers, and payers and streamlining prior authorization processes supports better health outcomes and a better healthcare experience for all,” said Chiquita Brooks-LaSure, CMS Administrator.
To read the final rule or the fact sheet, visit the CMS website.
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