CMS proposes rule to streamline prior authorization

CMS released a proposed rule on December 6 to promote transparency, efficiency, and automation in prior authorization processes. Certain requirements in the proposed rule are also intended to improve data accessibility for patients, providers, and payers.

To ensure electronic prior authorization, CMS proposed for impacted payers to develop and maintain a Fast Healthcare Interoperability Resources (FHIR) application programming interface (API). This FHIR API would improve automation and help providers “determine whether a prior authorization is required, identify prior authorization information and documentation requirements, as well as facilitate the exchange of prior authorization requests and decisions” from their EHRs and management systems, according to the CMS fact sheet.

The rule would require payers to use the prior authorization API to send decisions, publicly report certain metrics, and provide denial reasons within 72 hours for expedited (urgent) requests and seven calendar days for standard (non-urgent) requests.

CMS also proposed to improve health data access through APIs. Payers must include information on patients’ prior authorization decisions on the patient access API, and they must report annual metrics to CMS on patient use of the interface.

In addition, the proposed rule contains provisions to promote payer collaboration and transparency. According to the fact sheet, the rule would require payers to develop a provider access API to “share patient data with in-network providers with who the patient has a treatment relationship.”

“In an effort to ensure a patient’s data can follow them throughout their healthcare journey, we are proposing to require that payers would exchange patient data when a patient changes health plans with the patient’s permission,” said the fact sheet.

To promote alignment across coverage types, CMS said the rule would apply to Medicare Advantage organizations, state Medicaid and Children’s Health Insurance Program (CHIP) agencies, Medicaid managed care plans, CHIP managed care entities, and Qualified Health Plan issuers on the federally-facilitated exchange.

CMS also included a measure for critical access hospitals and other hospitals under the Medicare Promoting Interoperability Program as well as Merit-based Incentive Payment System eligible clinicians to encourage provider adoption of the electronic prior authorization process.

The proposed rule “withdraws and replaces the previous proposed rule, published in December 2020, and addresses public comments received on that proposed rule,” said the fact sheet.

If finalized, most of these requirements would take effect on January 1, 2026. Metric reporting would begin in March 2026. CMS released several requests for information regarding the proposed rule, and it is accepting comments until March 13, 2023.

Editor’s note: Find additional NAHRI coverage on prior authorization here.