CMS Issues Final Rule on Prior Authorizations

A final rule from the Centers for Medicare & Medicaid Services (CMS) setting time limits and other requirements related to prior authorizations drew generally positive reviews Wednesday from healthcare organizations, although some expressed concerns about specific provisions.

The rule, issued Wednesday morning, requires Medicare Advantage organizations, state Medicaid and Children’s Health Insurance Program (CHIP) fee-for-service programs, Medicaid managed care plans, and CHIP managed care entities to send prior authorization decisions within 72 hours for expedited (urgent) requests and 7 calendar days for standard (non-urgent) requests. The insurers also must report publicly on their prior authorization metrics.

The rule also requires these same insurers — as well as plans on the federally run Affordable Care Act insurance exchanges — to “provide a specific reason for denied prior authorization decisions, regardless of the method used to send the prior authorization request,” according to a CMS fact sheet. “Such decisions may be communicated via portal, fax, email, mail, or phone.”

The denial requirement, which doesn’t apply to prior authorization decisions for drugs, “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,” the fact sheet noted.

Another provision in the rule requires affected plans to automate the prior authorization process through the use of an electronic prior authorization application programming interface (API). “Medicare [fee-for-service] has already implemented an electronic prior authorization API, demonstrating the efficiencies other payers could realize,” CMS said in a press release. “Together, these new requirements for the prior authorization process will reduce administrative burden on the healthcare workforce, empower clinicians to spend more time providing direct care to their patients, and prevent avoidable delays in care for patients.”

“When a doctor says a patient needs a procedure, it is essential that it happens in a timely manner,” HHS Secretary Xavier Becerra said in the release. “Too many Americans are left in limbo, waiting for approval from their insurance company. Today the Biden-Harris administration is announcing strong action that will shorten these wait times by streamlining and better digitizing the approval process.”

Several physician groups praised the final rule. “Today’s final rule requires impacted plans to support an electronic prior authorization process that is embedded within physicians’ electronic health records, bringing much-needed automation and efficiency to the current time-consuming, manual workflow,” American Medical Association (AMA) president Jesse Ehrenfeld, MD, MPH, noted in a statement. “The AMA also appreciates that the rule will significantly enhance transparency around prior authorization by requiring specific denial reasons and public reporting of program metrics.”

The American Academy of Family Physicians (AAFP) also applauded the rule. “This marks significant progress to address care delays and the administrative burden physicians and their patients face daily,” AAFP president Steven Furr, MD, said in a statement. “Electronic prior authorization will help cut down on the time physicians spend requesting and appealing coverage authorization from plans, as well as provide patients with more visibility into their care.”

However, he added, “policymakers must also address the overwhelming volume of prior authorizations that physicians must complete. Physician practices are being forced to hire dedicated staff to handle prior authorizations instead of investing in staff or tools that would enhance patient care. Instead of interfering in the decisions family physicians make in consultation with their patients, our health care system should improve access to the primary care patients need.”

The American College of Rheumatology supported the rule, but said in a statement that it was “concerned with the inclusion of e-prior authorization measures for merit-based incentive payment system (MIPS)-eligible providers under the performance improvement category, as it will create additional burden for physicians.”

Premier, a healthcare group purchasing organization, had several other bones to pick with the rule. “While Premier appreciates CMS’ commitment to codifying required deadlines for prior authorization decisions by payers, postponing care for potentially up to seven days is still untenable when a patient’s health is on the line,” Soumi Saha, the company’s senior vice president for government affairs, said in a statement. “Instead of making patients and providers play a dangerous waiting game, Premier maintains that CMS should require payers to deliver responses within 72 calendar hours for standard, non-urgent services and within 24 calendar hours for urgent services.”

“Premier is also disappointed by the final rule’s lack of acknowledgement that a pathway to real-time prior authorization exists,” Saha continued. “CMS missed a valuable opportunity to develop incentives to move payers and providers closer to real-time processes using innovative technologies.”

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