CMS releases interoperability and prior authorization final rule

CMS recently released a final rule to improve interoperability and streamline prior authorization processes for medical items and services.

The final rule applies to Medicare Advantage organizations, Medicaid and Children’s Health Insurance Program fee-for-service programs, Medicaid managed care plans, and other select payers.

Beginning January 1, 2026, impacted payers will be required to send prior authorization decisions within 72 hours for expedited requests and seven days for standard requests. The reduced timeframe for standard requests cuts current decision times in half for some payers, according to CMS.

By the same date, these payers must provide a specific reason for all prior authorization request denials and publicly report certain prior authorization metrics annually.

In addition, the final rule takes aim at improving the electronic exchange of healthcare data through application programming interfaces (API). By January 1, 2027, payers must add prior authorization information to the data available via their Health Level 7® Fast Healthcare Interoperability Resources® API.

CMS will also require impacted payers to implement and maintain provider access and payer-to-payer APIs by January 1, 2027.

The final rule also added a new electronic prior authorization measure to the Health Information Exchange objective for the Merit-based Incentive Payment System (MIPS) Promoting Interoperability performance category and the Medicare Promoting Interoperability Program.

MIPS eligible clinicians will report this new measure beginning with the calendar year (CY) 2027 performance period/CY 2029 MIPS payment year. Critical access hospitals and other eligible hospitals will report the new measure beginning with the CY 2027 EHR reporting period.

CMS estimates that these finalized policies will lead to $15 billion in estimated savings over ten years. Revenue integrity professionals should review the final rule to ensure their organization is prepared to comply with upcoming policy changes.

Editor’s note: Find more NAHRI resources on prior authorization here.