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CMS proposes new prior authorization requirements for payers, including MA plans

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Dive Brief:

  • The CMS has issued a new rule meant to streamline prior authorization by requiring certain payers to implement an electronic prior authorization process and respond to requests more quickly.
  • The rule would also require payers to put in place standardized data exchange processes, to help them exchange data when a patient changes health insurers. If finalized, the policies would take effect in 2026.
  • The rule, which the CMS estimates will save hospitals and doctor’s offices more than $15 billion over 10 years, replaces one proposed in the final days of the Trump administration that was controversial with health insurers.

Dive Insight:

The CMS is once again tackling prior authorization in its new rule proposed Tuesday. Prior authorization, a process in which a physician must get the green light from an insurer for medication or treatment before administering it, has become increasingly common among payers as a way to curb unnecessary medical spending.

However, physicians argue that the additional administrative steps required before being able to provide care delays needed services and adds paperwork, contributing to burnout.

Regulators are proposing new requirements that would apply to state Medicaid and Children’s Health Insurance Program agencies, Medicaid and CHIP managed care plans and plans on the Affordable Care Act exchanges.

They will also apply to Medicare Advantage plans — one key way that the new rule differs from 2020’s iteration. The exclusion of MA plans, which are growing in popularity among Medicare seniors and expected to cover more than half of the Medicare population as early as next year, was a complaint from provider groups in the original rule.

Like its predecessor, the new rule includes requirements that payers provide doctors their rationale for denied requests. Payers would also be required to send decisions within 72 hours for urgent requests, and within seven calendar days for non-urgent requests — twice as fast as the existing MA response time limit, the CMS said.

The turnaround time in the final rule could be even shorter. Regulators are seeking comment on alternative time frames, like 48 hours for urgent requests and five calendar days for standard ones.

The rule would also require payers to build and maintain standardized application programming interfaces, or APIs, to automate the process for providers to determine whether a prior authorization is needed, identify any documentation requirements and facilitate the exchange of requests and decisions electronically.

The CMS also wants payers to build and maintain two additional APIs — one to share patient data with in-network providers treating the patient, and another to share patient data with other insurers when a patient moves to new coverage or has concurrent plans.

Payers would be required to share claims and encounter data, prior authorization requests and decisions and other data elements in the USCDI dataset in those Provider Access and Payer-to-Payer APIs, with patient permission.

Payers would not have to share cost information.

The CMS originally required payers to share patient data with one another at a patient’s request under information blocking rules finalized two years ago, with the goal of creating a longitudinal health record that could follow patients in a healthcare system, regardless of coverage changes.

However, regulators said last December they wouldn’t enforce the policy after payers raised concerns about operational challenges and risks to data quality, given a lack of specificity in the rule.

The CMS also wants to expand the existing Patient Access API to include information about prior authorization decisions. That API, which was also required by the interoperability regulations, allows payers to share claims and encounter information with members.

Regulators are also requesting information around standards for social risk factor data, exchanging behavioral health information electronically, improving medical documentation exchange between providers in traditional Medicare, advancing the Trusted Exchange Framework and Common Agreement, and how interoperability can improve maternal health outcomes.

Comments on the rule are due March 13.

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