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CMS Releases Final Rule on Prior Authorization

January 17, 2024

CMS today unveiled a final rule to streamline the prior authorization process and improve the electronic exchange of health information.

The federal agency said it expected the policies would modernize prior authorization and result in $15 billion in savings over 10 years.

“Together, these new requirements for the prior authorization process will reduce administrative burden on the health care workforce, empower clinicians to spend more time providing direct care to their patients, and prevent avoidable delays in care for patients,” CMS said in a statement.

Here’s what you need to know:

  • Who it affects:  The rule includes new requirements for Medicare Advantage organizations; Medicaid and the Children’s Health Insurance Program (CHIP) fee-for-service programs, Medicaid managed care plans, CHIP managed care entities, and issuers of Qualified Health Plans on the federally facilitated exchanges.
  • Streamlined decision-making:  The rule requires payors to send prior authorization decisions within 72 hours for urgent requests and seven calendar days for standard requests.
    • Payors also will need to include a specific reason for denying a prior authorization request and to publicly report prior authorization data metrics.
  • Electronic processes Payors also must implement a Health Level 7 (HL7®) Fast Healthcare Interoperability Resources Prior Authorization application programming interface to support electronic prior authorization.
  • New measure:  The rule includes a new electronic prior authorization measure for clinicians in the Merit-based Incentive Payment System and for eligible hospitals and critical access hospitals in the Medicare Promoting Interoperability Program.

“Increasing efficiency and enabling health care data to flow freely and securely between patients, providers, and payers and streamlining prior authorization processes supports better health outcomes and a better health care experience for all,” said CMS Administrator Chiquita Brooks-LaSure.

HAP supports policies at the state and federal level that improve the prior authorization process and increase access to care. A press release and a fact sheet about the final rule are available online.