The Centers for Medicare & Medicaid Services (CMS) finalized the CMS Interoperability and Prior Authorization Final Rule to streamline the prior authorization process for Medicare Advantage, Medicaid, CHIP, and Qualified Health Plans (QHPs) on Federally-Facilitated Exchanges (FFEs).

Stakeholders across the healthcare spectrum are welcoming the new CMS rule as a positive stride towards addressing longstanding concerns associated with prior authorization. This critical process has often been a bottleneck, leading to delays in patient care and unnecessary costs for healthcare providers. The consensus among stakeholders is that the finalized rule marks a step in the right direction, although some lingering concerns merit attention.

In the final rule, CMS doesn’t stop at technical specifications but operational provisions, such as prior authorization decision timeframes and provider notice requirements, are established to foster improved communication and transparency among payers, providers, and patients.

Redefining Decision Making for Healthcare Providers

Under the new rule, health insurers are obligated to provide a specific reason when denying a prior authorization request. This not only enhances transparency but also empowers healthcare providers by offering them insights into the decision-making process. The provision for resubmission or appeal in case of denial adds an extra layer of support for doctors advocating for their patients.

Payers Accountability and Transparency

While the CMS rule does not restrict payers from using prior authorization, it places a strong emphasis on accountability and transparency. Payers are now mandated to adhere to shorter decision timelines and provide a clear rationale for their decisions. This shift aims to strike a balance between the necessity of prior authorization and the need for expeditious decision-making.

Key Provisions: Nuts and Bolts of the Rule

1. Timeframes for Decision-Making

. The rule imposes specific timeframes for prior authorization decisions, setting a 72-hour turnaround for urgent requests and a seven-day window for standard requests. This move is geared towards expediting critical care processes.

. The rule mandates a specific reason for denying a prior authorization request and public reporting of prior authorization metrics by impacted payers.

2. FHIR-based Prior Authorization API

. The implementation of a Fast Healthcare Interoperability Resources (FHIR) -based API promises a more efficient electronic prior authorization process. This API facilitates seamless communication between healthcare providers and payers, automating end-to-end authorization procedures.

. Enforcement discretion for the Health Insurance Portability and Accountability Act of 1996 (HIPAA) X12 278 standard is announced, allowing flexibility for covered entities using FHIR-only or FHIR and X12 combination APIs.

. Compliance with API policies is delayed to January 1, 2027, and includes expanding Patient Access API, implementing Provider Access API, and payer-to-payer FHIR API for data exchange.

3. New Measure for MIPs

. Recognizing the need for a holistic approach, CMS introduces a new measure for Merit-based Incentive Payment System (MIPS) eligible clinicians. This measure aims to encourage the adoption of electronic prior authorization processes, aligning with the broader industry shift towards digitization. Mandated reporting of prior authorization metrics starting March 31, 2026, adds a layer of accountability.

“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,”.

said CMS Administrator Chiquita Brooks-LaSure in a statement.

The final rule is accessible for review here.

Projections estimate that the rule will generate approximately $15 billion in savings over the next decade. This financial windfall could potentially be redirected towards improving patient care, investing in technology, or addressing other critical healthcare needs.