CMS Finalizes Prior Authorization Rule

Last Friday, the Centers for Medicare and Medicaid Services (CMS) approved a final rule requiring payers to build application program interfaces to support data exchange and streamline prior authorization. Medicaid and the Children’s Health Insurance Program (CHIP); healthcare exchange plans are also required to comply with the rule.

CMS says the change allows providers earlier access to the type of documentation payers require and makes it easier for providers to send and receive prior authorization (PA) documentation electronically. From CMS Administrator Seema Verma via the CMS press release:

Thanks to this rule, millions of patients will no longer have to wrangle with prior providers or locate ancient fax machines to take possession of their own data. Many providers, too, will be freed from the burden of piecing together patients’ health histories based on incomplete, half-forgotten snippets of information supplied by the patients themselves, as well as the most onerous elements of prior authorization.

According to Modern Healthcare, the rule allows Medicaid and CHIP plans 72 hours to make PA decisions on urgent requests and seven calendar days for non-urgent requests. The rule also requires payers to make their PA metrics public and account for the number of authorized procedures. These new requirements go into effect on January 1, 2024.

The application programming interfaces (APIs) would give patients access to their own health information, so when they move plans or change providers, their data can move with them, Healthcare Finance reports.

America’s Health Insurance Plans (AHIP) rejected the rule in a statement, saying it’s incomplete and will disrupt payers from the processes they are already working on to streamline the transfer of information. 

From CEO Matt Eyles:

Unfortunately, today’s final rule from CMS is largely a series of empty promises. This shabbily and hastily constructed rule puts a plane in the air before the wings are bolted on by requiring health insurance providers to build these technologies with incomplete and untested instruction manuals. And, despite rushing the rule, this Administration requires insurance providers to build expensive IT bridges to nowhere by failing to establish comparable requirements for providers or their IT vendors to use the technologies.

CMS Prior Authorization Factsheet