CMS Streamlines Prior Authorization Process

January 29, 2024 On January 17, the Centers for Medicare & Medicaid Services finalized the “CMS Interoperability and Prior Authorization Final Rule.” This rule aims to provide better digitization of the prior authorization process and cut down on wait times for prior authorization decisions. According to the American Medical Association, issues related to the prior…

January 29, 2024

On January 17, the Centers for Medicare & Medicaid Services finalized the “CMS Interoperability and Prior Authorization Final Rule.” This rule aims to provide better digitization of the prior authorization process and cut down on wait times for prior authorization decisions.

According to the American Medical Association, issues related to the prior authorization process led 80% of patients to sometimes, often, or always abandon their recommended treatment.

In an effort to reduce the burden on patients, providers, and payers, CMS has created a rule to improve the electronic exchange of health information and reduce lengthy prior authorization processing times. CMS estimates that this new measure will save approximately $15 billion over 10 years. The new rule creates requirements for various healthcare programs, including Medicare Advantage, Medicaid, CHIP, and more.

Key elements of the rule include:

• An established turnaround time of 72 hours for urgent prior authorization requests and seven days for non-urgent requests
• A specified reason for the denial of a prior authorization request
• Public reporting of prior authorization metrics
• Implementation of an electronic prior authorization API (application programming interface) to reduce administrative burden

CMS administrator Chiquita Brooks-LaSure says, “CMS is committed to breaking down barriers in the healthcare system to make it easier for doctors and nurses to provide the care that people need to stay healthy.” 

What is prior authorization?

Insurance companies require prior authorization for certain medications or procedures. Prior authorization means that a healthcare provider must get approval from the patient’s insurance before proceeding with treatment. The prior authorization process is intended to limit unnecessary medical services.

When will these changes go into effect?

The deadline for compliance with the newly stated rules is January 1, 2027.