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Are You Prepared for the Proposed Rule Coming from CMS?

Prior authorizations in healthcare have been a useful tool in managed care, and like any tool, there are smart ways to employ them — as well as less efficient ways. Prior authorizations have been snarled in an array of non-standard implementations spanning paper or electronic faxes, web portals, and electronic HIPAA transaction formats. At the intersection of administrative processes and the point of care, hand offs have been introduced between practitioners and office support staff on the provider side and coordinators and medical reviewers on the payer side.

There is also the less-than-interoperable exchange of prior authorization requests and supporting information between providers and payers. As a result, the prior authorization process has introduced a significant burden to both providers and payers and delays in care for many patients.

To reduce the burden of the prior authorization, many providers and payers have come together to develop solutions and have found that standards and automation can reduce inefficiencies and speed up the prior authorization process. Voluntary adoption of standards and automation has lagged despite widely agreed perceived benefits of change from the status quo. The force of regulatory compliance may provide the necessary motivation for providers and payers to surmount the inertia to change from existing processes to interoperability that patients expect.

In 2020, CMS finalized the Interoperability and Patient Access final rule, setting a foundation for data standards and technology for patients, payers, and providers to work toward sharing information to empower patients with their health information. Following this, CMS drafted an Interoperability and Prior Authorization proposed rule that is expected to become available soon for public comment. CMS has signaled that a proposed rule is forthcoming via updates to the Federal Unified Agenda. Many are now asking, “What is the proposed rule and what should the expectation be of parties who are impacted by it?”

Why did CMS propose a rule for interoperability and prior authorizations?

CMS proposed a rule to reduce burden for payers, providers, and patients and to keep the patient at the center of their own care. CMS proposes to enhance certain policies from the CMS Interoperability and Patient Access Final Rule (85 FR 25510) from May 2020. CMS also adds several new proposals to increase data sharing and reduce burden by proposing changes to prior authorization practices. The Interoperability and Prior Authorization proposed rule has significant potential to decrease the burden associated with providers determining which items and services need a prior authorization and what documentation is needed to submit the prior authorization request. Burden on payers would also decrease as they would receive fewer incomplete prior authorization requests and fewer denied and appealed requests simply as the result of missing or incorrect documentation.

What does this proposed rule require for prior authorization burden reduction?

In the proposed rule, CMS proposed requirements to enhance the Patient Access API with information about pending and active prior authorizations decisions. Specifically for Medicare FFS, the proposed rule also aimed to require payers to implement a Documentation Requirement Lookup Service (DRLS) API and a prior authorization support (PAS) API. The PAS API would be required to have the capability to accept prior authorization requests from providers and return decisions that would be integrated within a provider’s workflow. CMS also proposed that documentation and prior authorization requirements might be searched by providers directly from electronic health records (EHRs) systems. The drafted rule also proposed requirements for payers to respond to prior authorization requests within certain timeframes and report certain metrics about prior authorization processes for transparency. The proposed rule also included requests for information (RFI) on how providers would benefit by being able to engage in prior authorization process directly from workflows and the elimination of faxes to transmit prior authorization requests and responses.

As drafted, the proposed rule also included other provisions that enhanced parts of the 2020 Interoperability and Patient Access final rule as well as requests for information on standard FHIR APIs and the measurement of uptake by patients and organizations.

Who may be impacted by proposed prior authorization regulation?

In the drafted Interoperability and Prior Authorization proposed rule, CMS identified state Medicaid and CHIP fee-for-service (FFS) programs, Medicaid managed care plans, CHIP managed care entities, and Qualified Health Plan (QHP) issuers on the Federally Facilitated Exchanges (FFEs) as entities covered under the rule. CMS did not include proposals for Medicare Advantage (MA) organizations, though there may be impacts to individuals eligible both for Medicare Advantage and Medicaid-managed care plans. Payers with multiple lines of business including those impacted and those not impacted by the proposed rule may opt to implement the proposals to take advantage of efficiencies, provide transparency for patients, and reduce variable processes for prior authorizations within their organization. While proposals do not directly obligate providers, providers may be impacted indirectly — to reduce burden — due to requirements on programs covered by the proposed rule.

Is CMS moving to publish the interoperability and prior authorization proposed rule?

The Interoperability and Prior Authorization rule was proposed by CMS late in 2020 and, as the new federal administration organized policy priorities and agenda in early 2021, the proposed rule was reviewed and provisions revised with a target to be released for comment in the 4th quarter of 2022 (per the Spring 2022 Federal Unified Agenda, reference here). In October 2022, CMS forwarded the Interoperability and Prior Authorization proposed rule to the federal Office of Management and Budget (OMB). It is anticipated that after this stage, the proposed rule will be published for public comment in the Federal Register. After a limited, statutory period of public comment and consideration of submitted comments, it is anticipated that CMS will produce an Interoperability and Prior Authorization final rule in 2023 with subsequent effective dates and enforcement.

Why not wait until CMS proposes or finalizes regulations to reduce the burden of prior authorization?

Systems that providers and payers utilize are designed for the requirements of current business processes and to comply with a myriad of complex regulations. The capacity of organizations to change within the effective dates of new regulations is challenging to achieve on schedule and shows that none can “go it alone.” Engagement with parties that form an end-to-end solution must be planned and executed with a balance of agility and appreciation for the magnitude of and evolution to scale. To coordinate the technology implementations, business process workflows, and multiple actors or organizations involved requires concerted effort and partnership among providers, payers, and vendors that support them.

For effective interoperability to improve upon prior authorization processes, it is essential for those impacted by proposed regulations to participate in the development of industry standards and real-world testing. With the knowledge and experience derived from participating in standards development and testing, these parties will be well positioned to submit comments on the Interoperability and Prior Authorization proposed rule during the available timeframe. By participating in standards development, testing, and commenting on proposed regulations, those impacted can provide expertise to regulators to assist in the production of final rules with a higher likelihood of meeting compliance and reducing burden in practice.