A Revolutionary Shift in Healthcare: CMS’ Final Rule Set to Streamline and Digitize Prior Authorization Process

Centers for Medicare & Medicaid Services

WASHINGTON, D.C. — In a defining move, the Centers for Medicare & Medicaid Services (CMS) has finalized a rule destined to significantly boost access to health information and streamline the labyrinthine prior authorization process. The Biden-Harris administration expects these reforms could lead to an estimated savings of approximately $15 billion over the next decade.

At the crux of these changes lies a concerted effort by the administration to expedite the prior authorization process. The encumbering process is set to be streamlined, digitized, and made more efficient, thereby reducing both the burden on patients and providers and the lengthy timelines associated with accessing vital procedures.

The final rule sets forth specific timelines within which certain payers must send decisions on prior authorization. Expedited requests are to receive responses within 72 hours and standard requests within a mere seven calendar days. This halved decision-making time, coupled with requirements for payers to provide explicit reasons for any denial and to publicly report metrics, marks an unprecedented shift toward transparency and efficiency.

In a leap forward for tech in healthcare, this rule stipulates the implementation of an application programming interface (API) known as Health Level 7 Fast Healthcare Interoperability Resources (HL7® FHIR®) for Prior Authorization. This system is set to revolutionize the prior authorization process, enabling seamless electronic communication between providers and payers, a move already adopted by Medicare fee-for-service.

Opting to wield their enforcement discretion judiciously, the administration will allow leeway in API implementation by not enforcing against covered entities that adopt an all-FHIR-based Prior Authorization API, under HIPAA Administrative Simplification.

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Furthering the commitment to efficient healthcare, CMS is establishing API requirements to bolster health data exchange. However, compliance with these policies has been postponed until January 1, 2027, reflecting public input and commentary. Payers affected will be required to expand their current Patient Access API and implement a Provider Access API to enhance access to patient data.

The final rule also introduces a novel Electronic Prior Authorization measure for eligible clinicians and hospitals, facilitating the reporting of their use of payers’ Prior Authorization APIs. This step is designed to generate a more efficient prior authorization process and support enhanced access to health information and top-tier, timely care.

The implications of this rule are far-reaching. It addresses the persistent issues and burdens associated with the prior authorization process. With the process digitized and streamlined, patients can expect quicker access to necessary procedures, diminished wait times, and overall improvement in access to care. The potential savings of $15 billion over a decade underscores the financial advantages of these policies.

The CMS final rule on augmenting access to health information and enhancing the prior authorization process aims to be a leap toward a more efficient, patient-focused healthcare system. It seeks to reduce administrative encumbrances, empower clinicians, and assure timely access to crucial care.

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