CMS streamlines prior authorizations in final rule

By staff writers

January 18, 2021 -- The U.S. Centers for Medicare and Medicaid Services (CMS) has issued a final rule that allows certain payors, providers, and patients to have electronic access to pending and active prior authorization decisions. The move will result in fewer repeated requests for prior authorizations and reduce costs, CMS said.

The "CMS Interoperability and Prior Authorization" final rule affects primarily Medicaid and Children's Health Insurance Program (CHIP) managed care plans, state Medicaid and CHIP fee-for-service programs (FFS), and issuers of individual market qualified health plans on the federally facilitated exchanges. Payors must implement application programming interfaces (APIs) to build, implement, and maintain APIs using the Health Level 7 Fast Healthcare Interoperability Resources standard.

Under the already established Patient Access API, payors must include claims and data such as laboratory results and pending as well as active prior authorization decisions. Payors are required to share this data directly with patients' providers if they ask for it and with other payors as the patient moves from one payor to another.

Additionally, the final rule gives Medicaid and CHIP FFS programs, as well as Medicaid and CHIP managed care plans, a maximum of 72 hours to make prior authorization decisions on urgent requests and seven calendar days for nonurgent requests. All payors subject to the rule are required to provide a specific reason for any denial beginning January 1, 2024, or the rating period that starts on or after January 1, 2024.

The payors must also make public prior authorization metrics that demonstrate their prior authorization process, CMS said.

Medicare Advantage plans are not subject to the final rule, but CMS said it is considering whether to do so in future rulemaking.

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