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Changes to Prior Authorization Are Coming… Slowly, but Surely

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Changes to Prior Authorization Are Coming… Slowly, but Surely

On December 13, 2022, CMS issued the Interoperability and Prior Authorization proposed rule, in which it outlined new requirements for Medicare Advantage (“MA”), state Medicaid Fee-for-Service programs, state Children’s Health Insurance Program (“CHIP”) Fee-for-Service, Medicaid managed care plans, CHIP managed care entities, and Qualified Health Plans (“QHP”) issuers on the Federally Facilitated Exchanges (collectively “impacted payers”) to improve the electronic exchange of health care information and streamline prior authorization for medical items and services. On February 8, 2024 CMS will officially publish its final rule implementing these changes.  However, I’ve reviewed a pre-publication copy of the rule and am eager to share what it contains. 

To improve the patient experience and access to care, CMS has finalized several new requirements for prior authorization processes that will reduce burden on patients and providers. These changes include: 

  • Prior Authorization Application Program Interface (“API”).  Requiring impacted payers to implement and maintain a Prior Authorization API. Providers can use the Prior Authorization API to determine whether a specific payer requires prior authorization for a certain item or service, thereby easing one of the major points of administrative burden in the existing prior authorization process. The Prior Authorization API will also allow providers to query the payer’s prior authorization documentation requirements directly from the provider’s system, which could facilitate the automated compilation of necessary information to submit a prior authorization request. Payer compliance with this requirement is currently scheduled for January 1, 2027. 
  • Provider Notice.  Beginning in 2026, impacted payers must provide a specific reason for denied prior authorization decisions, regardless of the method used to send the prior authorization request. Such decisions may be communicated via portal, fax, email, mail, or phone. As with all policies in this final rule, this provision does not apply to prior authorization decisions for drugs. This requirement is intended to both facilitate better communication and transparency between payers, providers, and patients, as well as improve providers’ ability to resubmit the prior authorization request, if necessary. 
  • Prior Authorization Metrics. CMS is requiring impacted payers to publicly report certain prior authorization metrics annually by posting them on their website. Payer compliance with this requirement is current scheduled to begin January 1, 2026, and the initial set of metrics must be reported by March 31, 2026. 


To learn more about this exciting new change, check out the CMS fact sheet, https://www.cms.gov/newsroom/fact-sheets/cms-interoperability-and-prior-authorization-final-rule-cms-0057-f. 



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