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New interoperability rules address prior authorization inefficiencies, CMS says


The Centers for Medicare and Medicaid Services has proposed a new rule that seeks to streamline prior authorizations to lighten clinician workload and allow them more time to see patients.

In theory, the rule would improve the electronic exchange of healthcare data among payers, providers and patients, and smooth out processes related to prior authorization to reduce provider and patient burden.

The hope is that this increased data flow would ultimately result in better quality care.

CMS cited the COVID-19 pandemic as a catalyst, highlighting inefficiencies in the healthcare system that include a lack of data sharing and access. 

The Office of the National Coordinator for Health IT is also proposing to adopt certain standards through an HHS rider on the CMS proposed rule.


Prior authorization — an administrative process used in healthcare for providers to request approval from payers to provide a medical service, prescription, or supply — takes place before a service is rendered. 

The rule proposes significant changes intended to improve the patient experience and alleviate some of the administrative burden prior authorization causes healthcare providers. Medicaid, CHIP and QHP payers would be required to build and implement FHIR-enabled APIs that could allow providers to know in advance what documentation would be needed for each different payer, streamline the documentation process, and enable providers to send prior authorization requests and receive responses electronically, directly from the provider’s EHR or other practice management system. 

While Medicare Advantage plans are not included in the proposals, CMS is considering whether to do so in future rulemaking.

According to CMS, the rule would also reduce the amount of time providers wait to receive prior authorization decisions from payers; it proposes a maximum of 72 hours for payers, with the exception of QHP issuers on the FFEs, to issue decisions on urgent requests, and proposes seven calendar days for non-urgent requests. 

Payers would also be required to provide a specific reason for any denial, in an attempt to foster transparency. To promote accountability for plans, the rule also requires them to make public certain metrics that demonstrate how many procedures they are authorizing.

The rule would also require impacted payers to implement and maintain an FHIR-based API to exchange patient data as patients move from one payer to another. In this way, patients who would otherwise not have access to their historic health information would be able to bring their information with them when they move from one payer to another, and would not lose that information by changing payers.

Payers, providers and patients would presumably have access to more information including pending and active prior authorization decisions, potentially allowing for fewer repeat prior authorizations, reducing burden and cost, and ensuring patients have better continuity of care, according to CMS.


For the American Hospital Association, the proposed rule is a mixed bag. Ashley Thompson, AHA’s senior vice president of public policy analysis and development, said that hospitals and health systems are appreciative of the efforts to remove barriers to patient care by streamlining the prior authorization process.

“While prior authorization can be a helpful tool for ensuring patients receive appropriate care, the practice is too often used in a manner that leads to dangerous delays in treatment, clinician burnout and more waste in the healthcare system,” she said in a statement. “The proposed rule is a welcome step toward helping clinicians spend their limited time on patient care.”

Yet the AHA expressed regret on one point in particular.

Thompson said the AHA is disappointed that CMS “chose not to include Medicare Advantage plans, many of which have implemented abusive prior authorization practices, as documented in our recent report. We urge the agency to reconsider and hold Medicare Advantage plans accountable to the same standards.”


The rule builds on the Interoperability and Patient Access Final Rule released earlier this year.

The rule requires payers in Medicaid, CHIP and QHP programs to build application programming interfaces to support data exchange and prior authorization. APIs allow two systems, or a payer’s system and a third-party app, to communicate and share data electronically.

Payers would be required to implement and maintain these APIs using the Health Level 7 (HL7) Fast Healthcare Interoperability Resources standard. The FHIR standard aims to bridge the gaps between systems using technology so both systems can understand and use the data they exchange.


“This proposed rule ushers in a new era of quality and lower costs in healthcare as payers and providers will now have access to complete patient histories, reducing unnecessary care and allowing for more coordinated and seamless patient care,” said CMS Administrator Seema Verma. “Each element of this proposed rule would play a key role in reducing onerous administrative burden on our frontline providers while improving patient access to health information. Prior authorization is a necessary and important tool for payers to ensure program integrity, but there is a better way to make the process work more efficiently to ensure that care is not delayed and we are not increasing administrative costs for the whole system.”

Twitter: @JELagasse
Email the writer: [email protected]


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