CMS Proposes Rule to Improve the Prior Authorization Process

WASHINGTON (December 7, 2022)—The Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule that it says would improve interoperability and streamline processes related to prior authorization for medical items and services.

CMS also said the rule would shorten the time frames for certain payers to respond to prior authorization requests and establish policies to make that process more efficient and transparent. The rule would also require certain payers to implement standards that would enable data exchange between payers if a patient changes payers or has concurrent coverage.

“CMS is committed to strengthening access to quality care and making it easier for clinicians to provide that care,” said CMS Administrator Chiquita Brooks-LaSure. “The prior authorization and interoperability proposals we are announcing today would streamline the prior authorization process and promote health care data sharing to improve the care experience across providers, patients, and caregivers—helping us to address avoidable delays in patient care and achieve better health outcomes for all.”

The proposed rule would address challenges with the prior authorization process faced by providers and patients. Proposals include requiring implementation of a Health Level 7 (HL7) Fast Healthcare Interoperability Resources (FHIR) standard Application Programming Interface (API) to support electronic prior authorization. They also include requirements for certain payers to include a specific reason when denying requests, publicly report certain prior authorization metrics, and send decisions within 72 hours for expedited (i.e., urgent) requests and seven calendar days for standard (i.e., non-urgent) requests, which is twice as fast as the existing Medicare Advantage response time limit.

In order to further support a streamlined prior authorization process, this proposed rule would add a new Electronic Prior Authorization measure for eligible hospitals and critical access hospitals under the Medicare Promoting Interoperability Program and for Merit-based Incentive Payment System (MIPS) eligible clinicians under the Promoting Interoperability performance category.

“While prior authorization has a role in health care … it has also been identified as a major source of provider burnout, and can become a health risk for patients if inefficiencies in the process cause care to be delayed,” CMS wrote in its fact sheet. 

Proposed policies in this rule would also enable improved access to health data, supporting higher-quality care for patients with fewer disruptions, CMS said in a news release. These policies include:

• expanding the current Patient Access API to include information about prior authorization decisions;
• allowing providers to access their patients’ data by requiring payers to build and maintain a Provider Access FHIR API, to enable data exchange from payers to in-network providers with whom the patient has a treatment relationship;
• and creating longitudinal patient records by requiring payers to exchange patient data using a Payer-to-Payer FHIR API when a patient moves between payers or has concurrent payers.

These proposed requirements would generally apply to Medicare Advantage (MA) 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 Exchanges. CMS estimates that efficiencies introduced through these policies would save physician practices and hospitals over $15 billion over a 10-year period.

Finally, the proposed rule includes five requests for information related to standards for social risk factor data, the electronic exchange of behavioral health information among behavioral health providers, improving the exchange of medical documentation between certain providers in the Medicare Fee-for-Service program, advancing the Trusted Exchange Framework and Common Agreement (TEFCA), and the role interoperability can play in improving maternal health outcomes.

The proposed rule withdraws and replaces the previous proposed rule that was published in December 2020 and addresses public comments received on that proposed rule.

For additional information, consult this fact sheet. The proposed rule is available to review here, and the deadline to submit comments is March 13, 2023.