CMS finalizes rule streamlining, digitizing prior authorization process
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Key takeaways:
- The rule requires decisions on standard requests within 7 days.
- Payers must also make moves to digitize and automate the process.
CMS has finalized a new final rule that aims to shorten prior authorization timelines and streamline processes to remove barriers to patient care, according to a press release.
The rule will require prior authorization decisions to be sent within 72 hours for urgent requests, or 7 days for standard requests, according to the release from CMS. Denials will require a specific reason, and payers must report certain prior authorization metrics on their website.
The rule is set to be in force Jan. 1, 2026. CMS estimates it will result in approximately $15 billion in savings over 10 years.
The American College of Rheumatology, in a statement released immediately following the CMS announcement, praised the reforms for their emphasis on efficiency and transparency.
“Prior authorization policies create significant undue burdens on patients and health care professionals and often result in significant delays to needed care, treatment abandonment and irreversible harm to patients’ health,” ACR President Deborah Dyett Desir, MD, said in a press release. “The ACR commends CMS for recognizing the negative impact of prior authorization on patients and the need to streamline the process to promote greater transparency between doctors’ offices and payers.”
The announcement was met with similar praise from the American Medical Association, which applauded CMS leadership for “bringing much-needed automation and efficiency to the current time-consuming, manual workflow.”
“The AMA also appreciates that the rule will significantly enhance transparency around prior authorization by requiring specific denial reasons and public reporting of program metrics as well as requiring that prior authorization information be available to patients to help them become more informed decision makers,” read the AMA statement, in part. “The AMA commends the Biden Administration for its prior authorization reforms that prioritize patients’ access to care and reducing administrative burdens for physicians and their staff.
However, the ACR also expressed concern regarding the final rule’s inclusion of electronic prior authorization measures for merit-based incentive payment system (MIPS)-eligible providers under the performance improvement category.
According to CMS, MIPS eligible clinicians will report the electronic prior authorization measure beginning in the 2027 performance period — the 2029 MIPS payment year — while eligible hospitals will do so beginning in the 2027 EHR reporting period.
“This will be an attestation measure, for which the MIPS eligible clinician, eligible hospital, or [critical access hospital] reports a yes/no response or claims an applicable exclusion, rather than the proposed numerator/denominator,” said CMS in a fact sheet on the final rule.
In its statement, the ACR argued this will “create additional burden for physicians.”
“While this final rule addresses many concerns about the use of utilization management tools, the ACR continues to urge Congress to pass the Improving Seniors’ Timely Access to Care Act (S. 3018/H.R. 3173) to statutorily address prior authorization issues in Medicare, Medicare Advantage and Medicaid plans,” the ACR statement added.
Meanwhile, in a move to digitize and automate the prior authorization process, the CMS final rule also requires payers to maintain a Health Level 7 Fast Healthcare Interoperability Resources prior authorization application programming interface (API). According to CMS, this interface can be used to “facilitate a more efficient electronic prior authorization process between providers and payers” by automating the end-to-end process.
“Medicare [fee-for-service] has already implemented an electronic prior authorization API, demonstrating the efficiencies other payers could realize by implementing such an API,” read the CMS release. “Together, these new requirements for the prior authorization process 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.”
The final rule applies to Medicare Advantage organizations, the 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 offered 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,” CMS Administrator Chiquita Brooks-LaSure said in the CMS release. “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.”
References:
CMS Interoperability and Prior Authorization Final Rule CMS-0057-F. https://www.cms.gov/newsroom/fact-sheets/cms-interoperability-and-prior-authorization-final-rule-cms-0057-f. Published Jan. 17, 2024. Accessed Jan. 17, 2024.
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